The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

58
54 Computing in the Clouds From the ether, massive memory, number-crunching and media streaming power is coming to companies and consumers. The IT grid in the sky: Making computing plug-anywhere like electricity 47 Reform Slowly Sprouts in Myanmar It's got a long way to go, but reform is moving in the longtime pariah state. The big questions: Will people's lives get better? And will the West end its sanctions? Center for Strategy, Enterprise & Intelligence provides expertise in strategy and management, enterprise development, intelligence, Internet and media. For subscriptions, research, and advisory services, please e-mail [email protected] or call/fax +63-2-5311182. Links to online material on public websites are current as of the week prior to the publication date, but might be removed without warning. Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future. NATION TECHNOLOGY 32 Publishing Goes Digital With 30 million Filipinos online and tablet computers all the rage all over the world, digital opportunities are exploding. Will Philippine publishers be go electronic and win or stick to paper and die? 40 How To Breed Innovation A major study expounds on the art and science of cultivating a corporate culture of innovation. The Philippine connection: Jollibee, Rags2Riches and other top innovators in the country WORLD 04 The Corona Impeachment The eight Articles of Impeachment, Chief Justice Renato Corona's responses, plus constitutionalist Fr. Joaquin Bernas's questions and issues for the 23 senator-judges to ponder. Plus the Prosecution and Defense teams. Tilting the scales of justice? A detailed review of how justices voted on 19 cases allegedly showing Corona's favor toward former president Gloria Arroyo. You be the judge: bias or no bias? BUSINESS Strategic Analysis and Research by the CENTER FOR STRATEGY, ENTERPRISE & INTELLIGENCE Volume 2 - Number 2 January 16-22, 2012 I leſt this nation stronger than when I came into office ~ Former president Gloria Arroyo in her paper, 'It's the Economy, Student!' e performance of her government, both economic and political, has been exposed as a huge failure ~ Budget Secretary Florencio Abad, responding to the Arroyo paper POINT & CLICK You can access online research via your Internet connection by clicking phrases in blue letters CONTENTS NATION BUSINESS WORLD TECHNOLOGY

description

Center for Strategy, Enterprise & Intelligence publishes The CenSEI Report, strategic analysis and research on national, business and global issues.

Transcript of The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Page 1: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

54 Computing in the Clouds From the ether massive memory number-crunching and media streaming power is coming to companies and consumers

bull The IT grid in the sky Making computing plug-anywhere like electricity

47 Reform Slowly Sprouts in MyanmarIts got a long way to go but reform is moving in the longtime pariah state The big questions Will peoples lives get better And will the West end its sanctions

Center for Strategy Enterprise amp Intelligence provides expertise in strategy and management enterprise development intelligence Internet and mediaFor subscriptions research and advisory services please e-mail reportcenseisolutionscom or callfax +63-2-5311182 Links to online material on public

websites are current as of the week prior to the publication date but might be removed without warning Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future

NATION

TECHNOLOGY

32 Publishing Goes DigitalWith 30 million Filipinos online and tablet computers all the rage all over the world digital opportunities are exploding Will Philippine publishers be go electronic and win or stick to paper and die

40 How To Breed InnovationA major study expounds on the art and science of cultivating a corporate culture of innovation

bull The Philippine connection Jollibee Rags2Riches and other top innovators in the country

WORLD

04 The Corona ImpeachmentThe eight Articles of Impeachment Chief Justice Renato Coronas responses plus constitutionalist Fr Joaquin Bernass questions and issues for the 23 senator-judges to ponder Plus the Prosecution and Defense teams

bull Tilting the scales of justice A detailed review of how justices voted on 19 cases allegedly showing Coronas favor toward former president Gloria Arroyo You be the judge bias or no bias

BUSINESS

Strategic Analysis and Research by the Center for Strategy enterpriSe amp intelligenCe

Volume 2 - Number 2 bull January 16-22 2012

I left this nation stronger than when I came into office ~ Former president Gloria Arroyo in her paper Its the Economy Student

The performance of her government both economic and political has been exposed as a huge failure

~ Budget Secretary Florencio Abad responding to the Arroyo paper

POINT amp CLICKYou can access

online research via your Internet

connection by clicking phrases

in blue letters

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The CenSEI Formula for Sound Decision-Making

In founding the Center for Strategy Enterprise amp Intelligence publisher of The cenSEI Report Managing Director Ricardo Saludo sought to bring to cenSEI clients and subscribers exactly those three ingredients of sound deliberation and decision

ldquoStart with strategic focus on what matters fundamentally and in the long termrdquo explains the graduate of Said Business Schoolrsquos Strategy and Innovation program at Oxford University ldquoThat perspective is often missing or obscured in blow-by-blow newsrdquo

Next intelligence harness expertise and research to profoundly understand and analyze issues That includes world-class studies and compelling footage available online plus topnotch policy and management experts on call

ldquoFinally there is enterpriserdquo says Saludo ldquoEnterprising solutions and innovations to be exactrdquo Not just options learned from Oxford and the University of Londonrsquos School of Oriental and African Studies from which he earned his MS in Public Policy and Management while serving in the Arroyo Cabinet and for a time leading the Civil Service Commission (CSC)

More than academic scholarship however itrsquos his decades in international journalism and national governance that honed Saludorsquos strategic insight As editor with Asiaweek magazine for 17 years then Secretary of the Cabinet handling top-level discussions and CSC Chairman the Ateneo cum laude alumnus applied strategy enterprise and intelligence on unfolding developments week in week out leading to major Asiaweek reports and Cabinet agenda and action

The same strategic discipline guides The cenSEI Report in our meticulous analysis and research And that formula of strategy enterprise and intelligence is available every week to subscribers as well as high-value clients and senior executives of our sponsors Thank you for your trust and confidence

Saludo Focus on what truly matters

4

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The charges responses and issues that 23 senator-

judges must ponderBy John Carlo Gil M Sadian

The Corona Impeachment

With the start of Chief Justice Renato Coronarsquos Senate impeachment trial this week The CenSEI Report presents prosecution allegations in the 56-page Articles of Impeachment and defense arguments in Coronarsquos formal Answer to the charges Plus ldquoQuestions for the Senaterdquo from one of the framers of the 1987 Constitution constitutionalist and law professor Fr Joaquin Bernas

Of the six exclusive grounds for impeachment laid down in Section 2 Article XI of the Constitution the eight Articles of Impeachment filed against Corona cited three grounds (1) betrayal of public trust (2) graft and corruption and (3) culpable violation of the Constitution This report on the allegations of the prosecution and the counter-arguments of the defense

NATION

5

The cenSEI Report bull January 16-22 2012

The Corona impeachment

provide the facts and expert knowledge to help readers assess whether or not the impeachment against the Chief Justice rests on solid legal ground

On Coronarsquos Alleged Partiality Prosecution The First Article of Impeachment alleges that Corona betrayed public trust by his ldquotrack record marked by partiality and subservience in cases involving the Arroyo Administrationrdquo which is traced to his history as Arroyorsquos chief of staff spokesman and acting Executive Secretary

In relation to this a press release by Senator Franklin Drilon enumerated 19 cases where Corona allegedly voted in favor of the Arroyo Administration (Our supplemental review of these 19 cases is appended to this discourse)

Defense Corona argued that he ldquocannot be held accountable for the outcome of cases before the Supreme Court which acts as a collegial tribunalrdquo He stressed that by mentioning decisions and actions of the High Court in the impeachment complaint the prosecutors ldquodemonstrate their lack of understanding of the concept of a collegial body like the Supreme Court where each member has a single voterdquo and that

ARTICLE I Respondent betrayed the public trust through his track record marked by partiality and subservience in cases involving the Arroyo administration from the time of his appointment as Su-preme Court Justice which contin-ued to his dubious appointment as a midnight Chief Justice and up to the present

ldquowhether he be the Chief Justice or themost junior associate his vote is of equal weight with that of the othersrdquo

Regarding his past posts in the Arroyo Administration Corona noted that it is ldquonot uncommon for Justices to have previously worked as professionals in close association with the Presidentrdquo

The Chief Justice also observed how the complaint in effect asks the Senate ldquoto review certain decisions of the Supreme Courtrdquo contrary to the ldquoessential feature of checks and balances in a republican form of government that no other department may pass upon judgments of the Supreme Courtrdquo

Coronarsquos Answer cites the 1990 decision on Maglasang vs People in which the High Court declared ldquoNo other department or agency may pass upon its judgments or declare them unjust Consequently and owing to the foregoing not even the President of the Philippines as Chief Executive may pass judgment on any of the Courts actsrdquo

On His lsquoMidnight AppointmentrsquoProsecution Corona is a midnight appointee in violation of Section 15 Article VII of the Constitution which states ldquoTwo months immediately before the next presidential elections and up to the end of his term a President or Acting President shall not make appointments except temporary appointments to executive positions when continued vacancies therein will prejudice public service or endanger public safetyrdquo

Defense Corona cites the Courtrsquos overwhelming majority decision in De

6

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Castro vs Judicial and Bar Council (JBC) as legal basis for his appointment Penned by Justice Lucas Bersamin the ruling said the Constitution ldquoconfined the prohibition to appointments made in the Executive Departmentrdquo It added ldquoThe framers [of the Constitution] did not need to extend the prohibition to appointments in the Judiciary because their establishment of the [Judicial and Bar Council] and their subjecting the nomination and screening of candidates for judicial positions to the unhurried and deliberate prior process of the JBC ensured that there would no longer be midnight appointments to the Judiciaryrdquo

Selected Issues Fr Bernas wrote ldquoI too opposed the exercise of the appointing power during the two-month prohibited period But the Supreme Court decided otherwise May the Senate review the Courtrsquos decision

Is it illegitimate to assume that the votes of Corona represented independent judgment

Prosecution Corona ldquofailed to disclose tothe public his statement of assets liabilities and net worthrdquo (SALN) in violation of Section 17 Article XI of the Constitution as well as the Anti-Graft and Corrupt Practices Act (RA 3019)

ARTICLE II Respondent committed culpable violation of the Constitution andor betrayed the public trust when he failed to disclose to the public his Statement of Assets Liabilities and Net worth as required under Sec 17 Art XI of the 1987 Constitution

Section 17 states ldquoA public officer or employee shall upon assumption of office and as often thereafter as may be required by law submit a declaration under oath of his assets liabilities and net worth In the case of the President the Vice-President the Members of the Cabinet the Congress the Supreme Court the Constitutional Commissions and other constitutional offices and officers of the armed forces with general or flag rank the declaration shall be disclosed to the public in the manner provided by lawrdquo

The complaint also alleges that Corona and his wife acquired a 300-sqm apartment in the Fort Taguig worth beyond his income as a public official and the property was not reported this in his SALN

Defense What the Constitution requires is the submission of officialsrsquo SALNs Disclosure to the public shall be ldquoin the manner provided by lawrdquo The implementing law is Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713) It prohibits any person to obtain or use SALNs ldquofor (1) any purpose contrary to morals or public policy or (2) any commercial purpose other than by news and communications media for dissemination to the general publicrdquo

Corona stated in his Answer that he ldquohas faithfully complied with this requirement every yearrdquo and this ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo He further explained that once an official submits his SALN public disclosure is no longer up to him

The Answer also says Corona ldquohas not prevented the public disclosure of his

7

The cenSEI Report bull January 16-22 2012

declarations of assets liabilities and net worth Firstly it is not for the Chief Justice to unilaterally decide whether to disclose or not to disclose them Secondly the release of the SALNs of Justices is regulated by law and the Courts various Resolutions cited above Thirdly CJ Corona never issued an order that forbids the public disclosure of his above declarationsrdquo

On the Taguig property Corona said he and his wife purchased the apartment on installment and declared it in his SALN as ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo

Selected Issues News and commentary have cited the September 22 1992 Supreme Court circular AM No 92-9-851-RTC regulating public access to the SALNs of justices and judges to protect them from ldquocircumstances which may endanger diminish or destroy their independence and objectivity in the performance of their judicial functions or expose them to revenge for adverse decisions kidnapping extortion blackmail or other untoward consequencesrdquo

Fr Bernas asks ldquoThe command on making assets and liabilities public is qualified by the clause lsquoin the manner provided by lawrsquo Is there a law providing the manner and did Corona violate it

Alternatively if there is no law applicable specifically to the judiciary may Corona follow instead the manner prescribed in Resolutions of the Supreme Court before him (Which I am told he does regularly) What evidence will be presented on the alleged illegally acquired propertyrdquo

ARTICLE III Respondent committed culpable violations of the Constitution and betrayed the public trust by failing to meet and observe the stringent standards under Art VIII section 7 (3) of the Constitution that provides that [a] member of the judiciary must be a person of proven competence integrity probity and independence in allowing the Supreme Court to act on mere letters filed by a counsel which caused the issuance of flip-flopping decisions in final and executory cases in creating an excessive entanglement with Mrs Arroyo through her appointment of his wife to office and in discussing with litigants regarding cases

The Third Article alleges that Corona betrayed public trust in three instances the 2011 review of a 2009 Philippine Airlines labor case the 2010 review of Vizconde Massacre verdicts and then-President Arroyorsquos appointment of Coronarsquos wife to a government post board director of John Hay Management Corp a state firm

Regarding the PAL case on October 2 2009 a Special Division of the Court found the airline guilty of illegal dismissal and ordered the reinstatement of 1423 employees Later on in a September 7 resolution the Courtrsquos Second Division denied with finality PALrsquos motion for reconsideration (MR) and ordered that no further pleadings be entertained

On October 4 2011 however the Court en banc issued AM No 11-10-1-SC recalling

The Corona impeachment

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 2: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

The CenSEI Formula for Sound Decision-Making

In founding the Center for Strategy Enterprise amp Intelligence publisher of The cenSEI Report Managing Director Ricardo Saludo sought to bring to cenSEI clients and subscribers exactly those three ingredients of sound deliberation and decision

ldquoStart with strategic focus on what matters fundamentally and in the long termrdquo explains the graduate of Said Business Schoolrsquos Strategy and Innovation program at Oxford University ldquoThat perspective is often missing or obscured in blow-by-blow newsrdquo

Next intelligence harness expertise and research to profoundly understand and analyze issues That includes world-class studies and compelling footage available online plus topnotch policy and management experts on call

ldquoFinally there is enterpriserdquo says Saludo ldquoEnterprising solutions and innovations to be exactrdquo Not just options learned from Oxford and the University of Londonrsquos School of Oriental and African Studies from which he earned his MS in Public Policy and Management while serving in the Arroyo Cabinet and for a time leading the Civil Service Commission (CSC)

More than academic scholarship however itrsquos his decades in international journalism and national governance that honed Saludorsquos strategic insight As editor with Asiaweek magazine for 17 years then Secretary of the Cabinet handling top-level discussions and CSC Chairman the Ateneo cum laude alumnus applied strategy enterprise and intelligence on unfolding developments week in week out leading to major Asiaweek reports and Cabinet agenda and action

The same strategic discipline guides The cenSEI Report in our meticulous analysis and research And that formula of strategy enterprise and intelligence is available every week to subscribers as well as high-value clients and senior executives of our sponsors Thank you for your trust and confidence

Saludo Focus on what truly matters

4

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The charges responses and issues that 23 senator-

judges must ponderBy John Carlo Gil M Sadian

The Corona Impeachment

With the start of Chief Justice Renato Coronarsquos Senate impeachment trial this week The CenSEI Report presents prosecution allegations in the 56-page Articles of Impeachment and defense arguments in Coronarsquos formal Answer to the charges Plus ldquoQuestions for the Senaterdquo from one of the framers of the 1987 Constitution constitutionalist and law professor Fr Joaquin Bernas

Of the six exclusive grounds for impeachment laid down in Section 2 Article XI of the Constitution the eight Articles of Impeachment filed against Corona cited three grounds (1) betrayal of public trust (2) graft and corruption and (3) culpable violation of the Constitution This report on the allegations of the prosecution and the counter-arguments of the defense

NATION

5

The cenSEI Report bull January 16-22 2012

The Corona impeachment

provide the facts and expert knowledge to help readers assess whether or not the impeachment against the Chief Justice rests on solid legal ground

On Coronarsquos Alleged Partiality Prosecution The First Article of Impeachment alleges that Corona betrayed public trust by his ldquotrack record marked by partiality and subservience in cases involving the Arroyo Administrationrdquo which is traced to his history as Arroyorsquos chief of staff spokesman and acting Executive Secretary

In relation to this a press release by Senator Franklin Drilon enumerated 19 cases where Corona allegedly voted in favor of the Arroyo Administration (Our supplemental review of these 19 cases is appended to this discourse)

Defense Corona argued that he ldquocannot be held accountable for the outcome of cases before the Supreme Court which acts as a collegial tribunalrdquo He stressed that by mentioning decisions and actions of the High Court in the impeachment complaint the prosecutors ldquodemonstrate their lack of understanding of the concept of a collegial body like the Supreme Court where each member has a single voterdquo and that

ARTICLE I Respondent betrayed the public trust through his track record marked by partiality and subservience in cases involving the Arroyo administration from the time of his appointment as Su-preme Court Justice which contin-ued to his dubious appointment as a midnight Chief Justice and up to the present

ldquowhether he be the Chief Justice or themost junior associate his vote is of equal weight with that of the othersrdquo

Regarding his past posts in the Arroyo Administration Corona noted that it is ldquonot uncommon for Justices to have previously worked as professionals in close association with the Presidentrdquo

The Chief Justice also observed how the complaint in effect asks the Senate ldquoto review certain decisions of the Supreme Courtrdquo contrary to the ldquoessential feature of checks and balances in a republican form of government that no other department may pass upon judgments of the Supreme Courtrdquo

Coronarsquos Answer cites the 1990 decision on Maglasang vs People in which the High Court declared ldquoNo other department or agency may pass upon its judgments or declare them unjust Consequently and owing to the foregoing not even the President of the Philippines as Chief Executive may pass judgment on any of the Courts actsrdquo

On His lsquoMidnight AppointmentrsquoProsecution Corona is a midnight appointee in violation of Section 15 Article VII of the Constitution which states ldquoTwo months immediately before the next presidential elections and up to the end of his term a President or Acting President shall not make appointments except temporary appointments to executive positions when continued vacancies therein will prejudice public service or endanger public safetyrdquo

Defense Corona cites the Courtrsquos overwhelming majority decision in De

6

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Castro vs Judicial and Bar Council (JBC) as legal basis for his appointment Penned by Justice Lucas Bersamin the ruling said the Constitution ldquoconfined the prohibition to appointments made in the Executive Departmentrdquo It added ldquoThe framers [of the Constitution] did not need to extend the prohibition to appointments in the Judiciary because their establishment of the [Judicial and Bar Council] and their subjecting the nomination and screening of candidates for judicial positions to the unhurried and deliberate prior process of the JBC ensured that there would no longer be midnight appointments to the Judiciaryrdquo

Selected Issues Fr Bernas wrote ldquoI too opposed the exercise of the appointing power during the two-month prohibited period But the Supreme Court decided otherwise May the Senate review the Courtrsquos decision

Is it illegitimate to assume that the votes of Corona represented independent judgment

Prosecution Corona ldquofailed to disclose tothe public his statement of assets liabilities and net worthrdquo (SALN) in violation of Section 17 Article XI of the Constitution as well as the Anti-Graft and Corrupt Practices Act (RA 3019)

ARTICLE II Respondent committed culpable violation of the Constitution andor betrayed the public trust when he failed to disclose to the public his Statement of Assets Liabilities and Net worth as required under Sec 17 Art XI of the 1987 Constitution

Section 17 states ldquoA public officer or employee shall upon assumption of office and as often thereafter as may be required by law submit a declaration under oath of his assets liabilities and net worth In the case of the President the Vice-President the Members of the Cabinet the Congress the Supreme Court the Constitutional Commissions and other constitutional offices and officers of the armed forces with general or flag rank the declaration shall be disclosed to the public in the manner provided by lawrdquo

The complaint also alleges that Corona and his wife acquired a 300-sqm apartment in the Fort Taguig worth beyond his income as a public official and the property was not reported this in his SALN

Defense What the Constitution requires is the submission of officialsrsquo SALNs Disclosure to the public shall be ldquoin the manner provided by lawrdquo The implementing law is Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713) It prohibits any person to obtain or use SALNs ldquofor (1) any purpose contrary to morals or public policy or (2) any commercial purpose other than by news and communications media for dissemination to the general publicrdquo

Corona stated in his Answer that he ldquohas faithfully complied with this requirement every yearrdquo and this ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo He further explained that once an official submits his SALN public disclosure is no longer up to him

The Answer also says Corona ldquohas not prevented the public disclosure of his

7

The cenSEI Report bull January 16-22 2012

declarations of assets liabilities and net worth Firstly it is not for the Chief Justice to unilaterally decide whether to disclose or not to disclose them Secondly the release of the SALNs of Justices is regulated by law and the Courts various Resolutions cited above Thirdly CJ Corona never issued an order that forbids the public disclosure of his above declarationsrdquo

On the Taguig property Corona said he and his wife purchased the apartment on installment and declared it in his SALN as ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo

Selected Issues News and commentary have cited the September 22 1992 Supreme Court circular AM No 92-9-851-RTC regulating public access to the SALNs of justices and judges to protect them from ldquocircumstances which may endanger diminish or destroy their independence and objectivity in the performance of their judicial functions or expose them to revenge for adverse decisions kidnapping extortion blackmail or other untoward consequencesrdquo

Fr Bernas asks ldquoThe command on making assets and liabilities public is qualified by the clause lsquoin the manner provided by lawrsquo Is there a law providing the manner and did Corona violate it

Alternatively if there is no law applicable specifically to the judiciary may Corona follow instead the manner prescribed in Resolutions of the Supreme Court before him (Which I am told he does regularly) What evidence will be presented on the alleged illegally acquired propertyrdquo

ARTICLE III Respondent committed culpable violations of the Constitution and betrayed the public trust by failing to meet and observe the stringent standards under Art VIII section 7 (3) of the Constitution that provides that [a] member of the judiciary must be a person of proven competence integrity probity and independence in allowing the Supreme Court to act on mere letters filed by a counsel which caused the issuance of flip-flopping decisions in final and executory cases in creating an excessive entanglement with Mrs Arroyo through her appointment of his wife to office and in discussing with litigants regarding cases

The Third Article alleges that Corona betrayed public trust in three instances the 2011 review of a 2009 Philippine Airlines labor case the 2010 review of Vizconde Massacre verdicts and then-President Arroyorsquos appointment of Coronarsquos wife to a government post board director of John Hay Management Corp a state firm

Regarding the PAL case on October 2 2009 a Special Division of the Court found the airline guilty of illegal dismissal and ordered the reinstatement of 1423 employees Later on in a September 7 resolution the Courtrsquos Second Division denied with finality PALrsquos motion for reconsideration (MR) and ordered that no further pleadings be entertained

On October 4 2011 however the Court en banc issued AM No 11-10-1-SC recalling

The Corona impeachment

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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    3. Page 53
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        2. Page 31
        3. Page 53
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Page 3: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

4

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The charges responses and issues that 23 senator-

judges must ponderBy John Carlo Gil M Sadian

The Corona Impeachment

With the start of Chief Justice Renato Coronarsquos Senate impeachment trial this week The CenSEI Report presents prosecution allegations in the 56-page Articles of Impeachment and defense arguments in Coronarsquos formal Answer to the charges Plus ldquoQuestions for the Senaterdquo from one of the framers of the 1987 Constitution constitutionalist and law professor Fr Joaquin Bernas

Of the six exclusive grounds for impeachment laid down in Section 2 Article XI of the Constitution the eight Articles of Impeachment filed against Corona cited three grounds (1) betrayal of public trust (2) graft and corruption and (3) culpable violation of the Constitution This report on the allegations of the prosecution and the counter-arguments of the defense

NATION

5

The cenSEI Report bull January 16-22 2012

The Corona impeachment

provide the facts and expert knowledge to help readers assess whether or not the impeachment against the Chief Justice rests on solid legal ground

On Coronarsquos Alleged Partiality Prosecution The First Article of Impeachment alleges that Corona betrayed public trust by his ldquotrack record marked by partiality and subservience in cases involving the Arroyo Administrationrdquo which is traced to his history as Arroyorsquos chief of staff spokesman and acting Executive Secretary

In relation to this a press release by Senator Franklin Drilon enumerated 19 cases where Corona allegedly voted in favor of the Arroyo Administration (Our supplemental review of these 19 cases is appended to this discourse)

Defense Corona argued that he ldquocannot be held accountable for the outcome of cases before the Supreme Court which acts as a collegial tribunalrdquo He stressed that by mentioning decisions and actions of the High Court in the impeachment complaint the prosecutors ldquodemonstrate their lack of understanding of the concept of a collegial body like the Supreme Court where each member has a single voterdquo and that

ARTICLE I Respondent betrayed the public trust through his track record marked by partiality and subservience in cases involving the Arroyo administration from the time of his appointment as Su-preme Court Justice which contin-ued to his dubious appointment as a midnight Chief Justice and up to the present

ldquowhether he be the Chief Justice or themost junior associate his vote is of equal weight with that of the othersrdquo

Regarding his past posts in the Arroyo Administration Corona noted that it is ldquonot uncommon for Justices to have previously worked as professionals in close association with the Presidentrdquo

The Chief Justice also observed how the complaint in effect asks the Senate ldquoto review certain decisions of the Supreme Courtrdquo contrary to the ldquoessential feature of checks and balances in a republican form of government that no other department may pass upon judgments of the Supreme Courtrdquo

Coronarsquos Answer cites the 1990 decision on Maglasang vs People in which the High Court declared ldquoNo other department or agency may pass upon its judgments or declare them unjust Consequently and owing to the foregoing not even the President of the Philippines as Chief Executive may pass judgment on any of the Courts actsrdquo

On His lsquoMidnight AppointmentrsquoProsecution Corona is a midnight appointee in violation of Section 15 Article VII of the Constitution which states ldquoTwo months immediately before the next presidential elections and up to the end of his term a President or Acting President shall not make appointments except temporary appointments to executive positions when continued vacancies therein will prejudice public service or endanger public safetyrdquo

Defense Corona cites the Courtrsquos overwhelming majority decision in De

6

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Castro vs Judicial and Bar Council (JBC) as legal basis for his appointment Penned by Justice Lucas Bersamin the ruling said the Constitution ldquoconfined the prohibition to appointments made in the Executive Departmentrdquo It added ldquoThe framers [of the Constitution] did not need to extend the prohibition to appointments in the Judiciary because their establishment of the [Judicial and Bar Council] and their subjecting the nomination and screening of candidates for judicial positions to the unhurried and deliberate prior process of the JBC ensured that there would no longer be midnight appointments to the Judiciaryrdquo

Selected Issues Fr Bernas wrote ldquoI too opposed the exercise of the appointing power during the two-month prohibited period But the Supreme Court decided otherwise May the Senate review the Courtrsquos decision

Is it illegitimate to assume that the votes of Corona represented independent judgment

Prosecution Corona ldquofailed to disclose tothe public his statement of assets liabilities and net worthrdquo (SALN) in violation of Section 17 Article XI of the Constitution as well as the Anti-Graft and Corrupt Practices Act (RA 3019)

ARTICLE II Respondent committed culpable violation of the Constitution andor betrayed the public trust when he failed to disclose to the public his Statement of Assets Liabilities and Net worth as required under Sec 17 Art XI of the 1987 Constitution

Section 17 states ldquoA public officer or employee shall upon assumption of office and as often thereafter as may be required by law submit a declaration under oath of his assets liabilities and net worth In the case of the President the Vice-President the Members of the Cabinet the Congress the Supreme Court the Constitutional Commissions and other constitutional offices and officers of the armed forces with general or flag rank the declaration shall be disclosed to the public in the manner provided by lawrdquo

The complaint also alleges that Corona and his wife acquired a 300-sqm apartment in the Fort Taguig worth beyond his income as a public official and the property was not reported this in his SALN

Defense What the Constitution requires is the submission of officialsrsquo SALNs Disclosure to the public shall be ldquoin the manner provided by lawrdquo The implementing law is Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713) It prohibits any person to obtain or use SALNs ldquofor (1) any purpose contrary to morals or public policy or (2) any commercial purpose other than by news and communications media for dissemination to the general publicrdquo

Corona stated in his Answer that he ldquohas faithfully complied with this requirement every yearrdquo and this ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo He further explained that once an official submits his SALN public disclosure is no longer up to him

The Answer also says Corona ldquohas not prevented the public disclosure of his

7

The cenSEI Report bull January 16-22 2012

declarations of assets liabilities and net worth Firstly it is not for the Chief Justice to unilaterally decide whether to disclose or not to disclose them Secondly the release of the SALNs of Justices is regulated by law and the Courts various Resolutions cited above Thirdly CJ Corona never issued an order that forbids the public disclosure of his above declarationsrdquo

On the Taguig property Corona said he and his wife purchased the apartment on installment and declared it in his SALN as ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo

Selected Issues News and commentary have cited the September 22 1992 Supreme Court circular AM No 92-9-851-RTC regulating public access to the SALNs of justices and judges to protect them from ldquocircumstances which may endanger diminish or destroy their independence and objectivity in the performance of their judicial functions or expose them to revenge for adverse decisions kidnapping extortion blackmail or other untoward consequencesrdquo

Fr Bernas asks ldquoThe command on making assets and liabilities public is qualified by the clause lsquoin the manner provided by lawrsquo Is there a law providing the manner and did Corona violate it

Alternatively if there is no law applicable specifically to the judiciary may Corona follow instead the manner prescribed in Resolutions of the Supreme Court before him (Which I am told he does regularly) What evidence will be presented on the alleged illegally acquired propertyrdquo

ARTICLE III Respondent committed culpable violations of the Constitution and betrayed the public trust by failing to meet and observe the stringent standards under Art VIII section 7 (3) of the Constitution that provides that [a] member of the judiciary must be a person of proven competence integrity probity and independence in allowing the Supreme Court to act on mere letters filed by a counsel which caused the issuance of flip-flopping decisions in final and executory cases in creating an excessive entanglement with Mrs Arroyo through her appointment of his wife to office and in discussing with litigants regarding cases

The Third Article alleges that Corona betrayed public trust in three instances the 2011 review of a 2009 Philippine Airlines labor case the 2010 review of Vizconde Massacre verdicts and then-President Arroyorsquos appointment of Coronarsquos wife to a government post board director of John Hay Management Corp a state firm

Regarding the PAL case on October 2 2009 a Special Division of the Court found the airline guilty of illegal dismissal and ordered the reinstatement of 1423 employees Later on in a September 7 resolution the Courtrsquos Second Division denied with finality PALrsquos motion for reconsideration (MR) and ordered that no further pleadings be entertained

On October 4 2011 however the Court en banc issued AM No 11-10-1-SC recalling

The Corona impeachment

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
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            2. Page 6
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                    2. Page 7
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                                1. Page 46 Off
Page 4: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

5

The cenSEI Report bull January 16-22 2012

The Corona impeachment

provide the facts and expert knowledge to help readers assess whether or not the impeachment against the Chief Justice rests on solid legal ground

On Coronarsquos Alleged Partiality Prosecution The First Article of Impeachment alleges that Corona betrayed public trust by his ldquotrack record marked by partiality and subservience in cases involving the Arroyo Administrationrdquo which is traced to his history as Arroyorsquos chief of staff spokesman and acting Executive Secretary

In relation to this a press release by Senator Franklin Drilon enumerated 19 cases where Corona allegedly voted in favor of the Arroyo Administration (Our supplemental review of these 19 cases is appended to this discourse)

Defense Corona argued that he ldquocannot be held accountable for the outcome of cases before the Supreme Court which acts as a collegial tribunalrdquo He stressed that by mentioning decisions and actions of the High Court in the impeachment complaint the prosecutors ldquodemonstrate their lack of understanding of the concept of a collegial body like the Supreme Court where each member has a single voterdquo and that

ARTICLE I Respondent betrayed the public trust through his track record marked by partiality and subservience in cases involving the Arroyo administration from the time of his appointment as Su-preme Court Justice which contin-ued to his dubious appointment as a midnight Chief Justice and up to the present

ldquowhether he be the Chief Justice or themost junior associate his vote is of equal weight with that of the othersrdquo

Regarding his past posts in the Arroyo Administration Corona noted that it is ldquonot uncommon for Justices to have previously worked as professionals in close association with the Presidentrdquo

The Chief Justice also observed how the complaint in effect asks the Senate ldquoto review certain decisions of the Supreme Courtrdquo contrary to the ldquoessential feature of checks and balances in a republican form of government that no other department may pass upon judgments of the Supreme Courtrdquo

Coronarsquos Answer cites the 1990 decision on Maglasang vs People in which the High Court declared ldquoNo other department or agency may pass upon its judgments or declare them unjust Consequently and owing to the foregoing not even the President of the Philippines as Chief Executive may pass judgment on any of the Courts actsrdquo

On His lsquoMidnight AppointmentrsquoProsecution Corona is a midnight appointee in violation of Section 15 Article VII of the Constitution which states ldquoTwo months immediately before the next presidential elections and up to the end of his term a President or Acting President shall not make appointments except temporary appointments to executive positions when continued vacancies therein will prejudice public service or endanger public safetyrdquo

Defense Corona cites the Courtrsquos overwhelming majority decision in De

6

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Castro vs Judicial and Bar Council (JBC) as legal basis for his appointment Penned by Justice Lucas Bersamin the ruling said the Constitution ldquoconfined the prohibition to appointments made in the Executive Departmentrdquo It added ldquoThe framers [of the Constitution] did not need to extend the prohibition to appointments in the Judiciary because their establishment of the [Judicial and Bar Council] and their subjecting the nomination and screening of candidates for judicial positions to the unhurried and deliberate prior process of the JBC ensured that there would no longer be midnight appointments to the Judiciaryrdquo

Selected Issues Fr Bernas wrote ldquoI too opposed the exercise of the appointing power during the two-month prohibited period But the Supreme Court decided otherwise May the Senate review the Courtrsquos decision

Is it illegitimate to assume that the votes of Corona represented independent judgment

Prosecution Corona ldquofailed to disclose tothe public his statement of assets liabilities and net worthrdquo (SALN) in violation of Section 17 Article XI of the Constitution as well as the Anti-Graft and Corrupt Practices Act (RA 3019)

ARTICLE II Respondent committed culpable violation of the Constitution andor betrayed the public trust when he failed to disclose to the public his Statement of Assets Liabilities and Net worth as required under Sec 17 Art XI of the 1987 Constitution

Section 17 states ldquoA public officer or employee shall upon assumption of office and as often thereafter as may be required by law submit a declaration under oath of his assets liabilities and net worth In the case of the President the Vice-President the Members of the Cabinet the Congress the Supreme Court the Constitutional Commissions and other constitutional offices and officers of the armed forces with general or flag rank the declaration shall be disclosed to the public in the manner provided by lawrdquo

The complaint also alleges that Corona and his wife acquired a 300-sqm apartment in the Fort Taguig worth beyond his income as a public official and the property was not reported this in his SALN

Defense What the Constitution requires is the submission of officialsrsquo SALNs Disclosure to the public shall be ldquoin the manner provided by lawrdquo The implementing law is Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713) It prohibits any person to obtain or use SALNs ldquofor (1) any purpose contrary to morals or public policy or (2) any commercial purpose other than by news and communications media for dissemination to the general publicrdquo

Corona stated in his Answer that he ldquohas faithfully complied with this requirement every yearrdquo and this ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo He further explained that once an official submits his SALN public disclosure is no longer up to him

The Answer also says Corona ldquohas not prevented the public disclosure of his

7

The cenSEI Report bull January 16-22 2012

declarations of assets liabilities and net worth Firstly it is not for the Chief Justice to unilaterally decide whether to disclose or not to disclose them Secondly the release of the SALNs of Justices is regulated by law and the Courts various Resolutions cited above Thirdly CJ Corona never issued an order that forbids the public disclosure of his above declarationsrdquo

On the Taguig property Corona said he and his wife purchased the apartment on installment and declared it in his SALN as ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo

Selected Issues News and commentary have cited the September 22 1992 Supreme Court circular AM No 92-9-851-RTC regulating public access to the SALNs of justices and judges to protect them from ldquocircumstances which may endanger diminish or destroy their independence and objectivity in the performance of their judicial functions or expose them to revenge for adverse decisions kidnapping extortion blackmail or other untoward consequencesrdquo

Fr Bernas asks ldquoThe command on making assets and liabilities public is qualified by the clause lsquoin the manner provided by lawrsquo Is there a law providing the manner and did Corona violate it

Alternatively if there is no law applicable specifically to the judiciary may Corona follow instead the manner prescribed in Resolutions of the Supreme Court before him (Which I am told he does regularly) What evidence will be presented on the alleged illegally acquired propertyrdquo

ARTICLE III Respondent committed culpable violations of the Constitution and betrayed the public trust by failing to meet and observe the stringent standards under Art VIII section 7 (3) of the Constitution that provides that [a] member of the judiciary must be a person of proven competence integrity probity and independence in allowing the Supreme Court to act on mere letters filed by a counsel which caused the issuance of flip-flopping decisions in final and executory cases in creating an excessive entanglement with Mrs Arroyo through her appointment of his wife to office and in discussing with litigants regarding cases

The Third Article alleges that Corona betrayed public trust in three instances the 2011 review of a 2009 Philippine Airlines labor case the 2010 review of Vizconde Massacre verdicts and then-President Arroyorsquos appointment of Coronarsquos wife to a government post board director of John Hay Management Corp a state firm

Regarding the PAL case on October 2 2009 a Special Division of the Court found the airline guilty of illegal dismissal and ordered the reinstatement of 1423 employees Later on in a September 7 resolution the Courtrsquos Second Division denied with finality PALrsquos motion for reconsideration (MR) and ordered that no further pleadings be entertained

On October 4 2011 however the Court en banc issued AM No 11-10-1-SC recalling

The Corona impeachment

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        2. Page 31
        3. Page 53
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Page 5: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

6

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Castro vs Judicial and Bar Council (JBC) as legal basis for his appointment Penned by Justice Lucas Bersamin the ruling said the Constitution ldquoconfined the prohibition to appointments made in the Executive Departmentrdquo It added ldquoThe framers [of the Constitution] did not need to extend the prohibition to appointments in the Judiciary because their establishment of the [Judicial and Bar Council] and their subjecting the nomination and screening of candidates for judicial positions to the unhurried and deliberate prior process of the JBC ensured that there would no longer be midnight appointments to the Judiciaryrdquo

Selected Issues Fr Bernas wrote ldquoI too opposed the exercise of the appointing power during the two-month prohibited period But the Supreme Court decided otherwise May the Senate review the Courtrsquos decision

Is it illegitimate to assume that the votes of Corona represented independent judgment

Prosecution Corona ldquofailed to disclose tothe public his statement of assets liabilities and net worthrdquo (SALN) in violation of Section 17 Article XI of the Constitution as well as the Anti-Graft and Corrupt Practices Act (RA 3019)

ARTICLE II Respondent committed culpable violation of the Constitution andor betrayed the public trust when he failed to disclose to the public his Statement of Assets Liabilities and Net worth as required under Sec 17 Art XI of the 1987 Constitution

Section 17 states ldquoA public officer or employee shall upon assumption of office and as often thereafter as may be required by law submit a declaration under oath of his assets liabilities and net worth In the case of the President the Vice-President the Members of the Cabinet the Congress the Supreme Court the Constitutional Commissions and other constitutional offices and officers of the armed forces with general or flag rank the declaration shall be disclosed to the public in the manner provided by lawrdquo

The complaint also alleges that Corona and his wife acquired a 300-sqm apartment in the Fort Taguig worth beyond his income as a public official and the property was not reported this in his SALN

Defense What the Constitution requires is the submission of officialsrsquo SALNs Disclosure to the public shall be ldquoin the manner provided by lawrdquo The implementing law is Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713) It prohibits any person to obtain or use SALNs ldquofor (1) any purpose contrary to morals or public policy or (2) any commercial purpose other than by news and communications media for dissemination to the general publicrdquo

Corona stated in his Answer that he ldquohas faithfully complied with this requirement every yearrdquo and this ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo He further explained that once an official submits his SALN public disclosure is no longer up to him

The Answer also says Corona ldquohas not prevented the public disclosure of his

7

The cenSEI Report bull January 16-22 2012

declarations of assets liabilities and net worth Firstly it is not for the Chief Justice to unilaterally decide whether to disclose or not to disclose them Secondly the release of the SALNs of Justices is regulated by law and the Courts various Resolutions cited above Thirdly CJ Corona never issued an order that forbids the public disclosure of his above declarationsrdquo

On the Taguig property Corona said he and his wife purchased the apartment on installment and declared it in his SALN as ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo

Selected Issues News and commentary have cited the September 22 1992 Supreme Court circular AM No 92-9-851-RTC regulating public access to the SALNs of justices and judges to protect them from ldquocircumstances which may endanger diminish or destroy their independence and objectivity in the performance of their judicial functions or expose them to revenge for adverse decisions kidnapping extortion blackmail or other untoward consequencesrdquo

Fr Bernas asks ldquoThe command on making assets and liabilities public is qualified by the clause lsquoin the manner provided by lawrsquo Is there a law providing the manner and did Corona violate it

Alternatively if there is no law applicable specifically to the judiciary may Corona follow instead the manner prescribed in Resolutions of the Supreme Court before him (Which I am told he does regularly) What evidence will be presented on the alleged illegally acquired propertyrdquo

ARTICLE III Respondent committed culpable violations of the Constitution and betrayed the public trust by failing to meet and observe the stringent standards under Art VIII section 7 (3) of the Constitution that provides that [a] member of the judiciary must be a person of proven competence integrity probity and independence in allowing the Supreme Court to act on mere letters filed by a counsel which caused the issuance of flip-flopping decisions in final and executory cases in creating an excessive entanglement with Mrs Arroyo through her appointment of his wife to office and in discussing with litigants regarding cases

The Third Article alleges that Corona betrayed public trust in three instances the 2011 review of a 2009 Philippine Airlines labor case the 2010 review of Vizconde Massacre verdicts and then-President Arroyorsquos appointment of Coronarsquos wife to a government post board director of John Hay Management Corp a state firm

Regarding the PAL case on October 2 2009 a Special Division of the Court found the airline guilty of illegal dismissal and ordered the reinstatement of 1423 employees Later on in a September 7 resolution the Courtrsquos Second Division denied with finality PALrsquos motion for reconsideration (MR) and ordered that no further pleadings be entertained

On October 4 2011 however the Court en banc issued AM No 11-10-1-SC recalling

The Corona impeachment

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
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            2. Page 6
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Page 6: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

7

The cenSEI Report bull January 16-22 2012

declarations of assets liabilities and net worth Firstly it is not for the Chief Justice to unilaterally decide whether to disclose or not to disclose them Secondly the release of the SALNs of Justices is regulated by law and the Courts various Resolutions cited above Thirdly CJ Corona never issued an order that forbids the public disclosure of his above declarationsrdquo

On the Taguig property Corona said he and his wife purchased the apartment on installment and declared it in his SALN as ldquomay be verified upon a proper request with the Office of the Clerk of Courtrdquo

Selected Issues News and commentary have cited the September 22 1992 Supreme Court circular AM No 92-9-851-RTC regulating public access to the SALNs of justices and judges to protect them from ldquocircumstances which may endanger diminish or destroy their independence and objectivity in the performance of their judicial functions or expose them to revenge for adverse decisions kidnapping extortion blackmail or other untoward consequencesrdquo

Fr Bernas asks ldquoThe command on making assets and liabilities public is qualified by the clause lsquoin the manner provided by lawrsquo Is there a law providing the manner and did Corona violate it

Alternatively if there is no law applicable specifically to the judiciary may Corona follow instead the manner prescribed in Resolutions of the Supreme Court before him (Which I am told he does regularly) What evidence will be presented on the alleged illegally acquired propertyrdquo

ARTICLE III Respondent committed culpable violations of the Constitution and betrayed the public trust by failing to meet and observe the stringent standards under Art VIII section 7 (3) of the Constitution that provides that [a] member of the judiciary must be a person of proven competence integrity probity and independence in allowing the Supreme Court to act on mere letters filed by a counsel which caused the issuance of flip-flopping decisions in final and executory cases in creating an excessive entanglement with Mrs Arroyo through her appointment of his wife to office and in discussing with litigants regarding cases

The Third Article alleges that Corona betrayed public trust in three instances the 2011 review of a 2009 Philippine Airlines labor case the 2010 review of Vizconde Massacre verdicts and then-President Arroyorsquos appointment of Coronarsquos wife to a government post board director of John Hay Management Corp a state firm

Regarding the PAL case on October 2 2009 a Special Division of the Court found the airline guilty of illegal dismissal and ordered the reinstatement of 1423 employees Later on in a September 7 resolution the Courtrsquos Second Division denied with finality PALrsquos motion for reconsideration (MR) and ordered that no further pleadings be entertained

On October 4 2011 however the Court en banc issued AM No 11-10-1-SC recalling

The Corona impeachment

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
        3. Page 53
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Page 7: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

8

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

the September 7 resolution in response to a letter from PAL lawyer Estelito Mendoza alleging a procedural lapse the September 7 resolution was issued by the Second Division not by the Special Division which rendered the original decision

Recall of the FASAP vs PAL RulingProsecution Corona allowed the Court to act on mere letters from counsel in Flight Attendants and Stewards Association of the Philippines (FASAP) vs Philippine Airlines (PAL) leading to flip-flopping decisions ldquoThe Court did not even require FASAP to comment on those letters of PALrsquos counsel Atty Estelito Mendoza betraying Coronarsquos lack of ethical principles and disdain for fairnessrdquo

Defense According to Coronarsquos Answer ldquoLawyers and litigants often write the Supreme Court or the Chief Justice regarding their cases The Supreme Court uniformly treats all such letters as official communications that it must act on when warranted Letters are endorsed to the proper division or the Supreme Court en banc in which their subject matters are pending No letter to the Supreme Court is treated in secretrdquo

The Answer also explained that AM No 11-10-1-SC did not reverse the FASAP vs PAL ruling but merely recalled it for review by the proper division of the Court That division has yet to decide the case so no decision has been reversed

On the Vizconde CaseProsecution Corona betrayed public trust by discussing the Lejano vs People case then pending with the Supreme Court with Lauro Vizconde whose wife and daughters

were killed in the massacre that is the subject of Lejano vs People Moreover Corona allegedly told Vizconde that Senior Justice Antonio Carpio was lobbying other Justices to secure the acquittal of Hubert Webb and other convicts jailed for the massacre

Defense Corona does not deny the meeting with Vizconde But he stressed ldquoonly Dante Jimenez as head of the Volunteers Against Crime and Corruption (VACC) was cleared to make a courtesy call on the newly appointed Chief Justicerdquo who ldquowas thus surprised to see Lauro Vizconde come into his chambers with Jimenezrdquo The Answer admits that Vizconde remained during that meeting as ldquoa result of etiquette and mannersrdquo but Corona denied telling him that Carpio lobbied with other Justices

On the Government Post of Coronarsquos Wife Prosecution Corona ldquocompromised his independence when his wife accepted an appointment from Mrs Arroyo to the Board of John Hay Management Corporation (JHMC)rdquo Moreover ldquocomplaints have been filed against Mrs Corona by disgruntled members of the Board of JHMC and certain officers and employeesrdquo

Defense ldquoNo law prohibits the wife of a Chief Justice from pursuing her own career in the governmentrdquo The Answer added that Mrs Corona was already part of JHMC even before her husband was appointedto the Supreme Court Regarding the alleged complaints against Mrs Corona the Answer noted that ldquoCorona is not being impeached for alleged offenses of his wiferdquo

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
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            5. Page 12
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                2. Page 6
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                    2. Page 7
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                              1. Button 20
                                1. Page 46 Off
Page 8: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

9

The cenSEI Report bull January 16-22 2012

Selected Issues Fr Bernas asks ldquoIs the flip-flopping of the Court in collegial decisions attributable to Corona alone or to a body struggling to arrive at justice Did Corona himself flip-flop Is the Court prohibited from modifying prior decisions or doctrines When and by whom was Mrs Corona appointed to John Hay Management Corporation Is a husband obliged to compel his wife to turn down an appointment Or did he try to dissuade her at all Or was he overruled by the wife Can a husband be made answerable for acts of the wife Will Justice Carpio be asked to testify about the alleged lobbying about pending casesrdquo

Background On July 22 2010 an impeachment complaint was filed against Gutierrez On August 10 that same year another impeachment complaint was filed against her Considering that the Constitution prohibits two impeachment proceedings against one official within one year the Supreme Court voting 12-0 issued a status quo ante order stopping the House impeachment proceedings until it could decide the case

The Supreme Court eventually ruled in Gutierrez vs House Committee on Justice that the second impeachment complaint did not violate the Constitution Thus the Court allowed the House proceedings which eventually led to Gutierrezrsquos impeachment

Prosecution The Courtrsquos issuance of the status quo ante order against the House of Representatives was a blatant disregard of the principle of separation of powers in order to protect then-Ombudsman Gutierrez

Defense The landmark decision in Francisco vs House of Representatives penned by Justice Conchita Carpio Morales affirmed the Supreme Courtrsquos power to determine whether the House violated the Constitution or gravely abused its discretion in exercising its power of impeachment

Selected Issues Fr Bernas asks ldquoWhat can be made of the fact that the status quo ante order was a resolution of eight justices How did Corona vote on the later reversal of the status quo ante orderrdquo

ARTICLE IV Respondent betrayed the public trust andor committed culpable violation of the Constitution when it blatantly disregarded the principle of separation of powers by issuing a status quo ante order against the House of Representatives in the case concerning the impeachment of then Ombudsman Merceditas Navarro-Gutierrez

ARTICLE V Respondent committed culpable violations of the constitution through wanton arbitrariness and partiality in consistently disregarding the principle of res judicata and in deciding in favor of gerrymandering in the cases involving the 16 newly-created cities and the promotion of Dinagat Island into a province

The Corona impeachment

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
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            2. Page 6
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                    2. Page 7
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                        2. Page 7
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                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 9: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

10

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Prosecution The Fifth Article specifically attacks the Supreme Court decisions in League of Cities vs Comelec regarding 16 new cities created by RA 9009 and Navarro vs Ermita on the creation of the Province of Dinagat Island by RA 9355 FASAP vs Philippine Airlines gets the spotlight again with the allegation that Corona disregarded the principle of res judicata which puts an end to judicial proceedings by abandoning a final ruling in that case

Defense Coronarsquos Answer quoted Justice Roberto Abadrsquos concurring opinion in Navarro to show there was no flip-flopping in the League of Cities case ldquoOf 23 Justices who voted in the case at any of its various stages 20 Justices stood by their original positions They never reconsidered their views Only three did so and not on the same occasion showing no wholesale change of votes at any timerdquo

In League of Cities 23 Justices participated because seven retired while the case was under review Only three switched votes they did not ldquoflip-floprdquo but switched just once As for Navarro the Answer declined to dwell on it since it is still under motion for reconsideration On FASAP vs PAL Corona inhibited from this case and therefore was not party to the ruling still under review

Selected Issues Fr Bernas asks ldquoWere not the League of Cities case and the Dinagat case collegial decisions upholding acts of Congress Was not the FASAP decision also collegialrdquo The lawyer-priest apparently wonders why Corona would be impeached by the House for affirming a law enacted by legislators

ARTICLE VI Respondent betrayed the public trust by arrogating unto himself and to a committee he created the authority and jurisdiction to improperly investigate an alleged erring member of the Supreme Court for the purpose of exculpating him Such authority and jurisdiction is properly reposed by the constitution in the House of Representatives via impeachment

Prosecution Corona betrayed public trust when he lsquocreatedrsquo the Supreme Court Ethics Committee to probe alleged plagiarism by Justice Mariano Del Castillo in the decision in Vinuya vs Executive Secretary The Court en banc voting 10-2 eventually adopted the Ethics Committeersquos recommendation to absolve Del Castillo of the charge in a resolution titled In re Charges of Plagiarism against J Del CastilloThe impeachment complaint also questions the Supreme Courtrsquos power to create the committee for encroaching upon the impeachment power of the House

Defense Corona argued ldquoThe Committeersquos power is only recommendatory If the offense is impeachable the Supreme Court en banc will refer the matter to the House of Representatives for investigation On the other hand if the offense is non-impeachable the Supreme Court en banc may decide the case and if warranted impose administrative sanctions against the offenderrdquo

As to the creation the committee Corona traces it to the ldquopower of the Supreme

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 10: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

11

The cenSEI Report bull January 16-22 2012

ARTICLE VII Respondent betrayed the public trust through his partiality in granting a temporary restraining order (TRO) in favor of former President Gloria Macapagal-Arroyo and her husband Jose Miguel Arroyo in order to give them an opportunity to escape prosecution and to frustrate the ends of justice and in distorting the Supreme Court decision on the effectivity of the TRO in view of a clear failure to comply with the conditions of the Supreme Courts own TRO

Court to discipline its own members as provided for in Section 6 Article VIII of the Constitutionrdquo granting the High Court ldquoadministrative supervision over all the courts and the personnel thereofrdquo

Notably too the Ethics Committee was created through AM 10-4-20-SC under Chief Justice Reynato Puno mdash not under or by Corona And the creation of the committee was a collegial act of the Court which cannot be attributed to one person alone

Selected Issue Fr Bernas asks ldquoIs the Supreme Court powerless to look into the activities of its members (eg plagiarism) especially if it involves things that might affect the reputation of the Court

Prosecution Article 7 dwells on the temporary restraining order (TRO) against a Department of Justice Watch List Order (WLO) that kept the Arroyos from leaving the country Corona granted the TRO

to provide former president Arroyo the ldquoopportunity to escape prosecutionrdquo and that the Court ldquowas coordinating with the Arroyos who made multiple flight bookings in expectation of the issuance of the TROrdquo

Corona or the Court also violated the Courtrsquos own Internal Rules by disregarding one justicersquos recommendation to have a hearing before issuing the TRO Corona also distorted the Courtrsquos decision regarding the effectivity of the TRO in line with Justice Lourdes Serenorsquos opinion that its effectivity was suspended pending Arroyorsquos compliance with all the conditions laid down by the Court including the amendment of the Special Power of Attorney (SPA) given to Arroyorsquos lawyer

Defense Corona denied that the Court coordinated with Arroyo on the restraining order noting that ldquoInformation that the Supreme Court en banc would be taking up those TRO applications on the morning of 15 November 2011 was widely knownrdquo as ldquocrews of all major television stations and print reporters had been camping at the gates of the Supreme Court that very morningrdquo Thus it was ldquonot surprising that the Arroyos and their lawyers apparently prepared for the chance that the Supreme Court might favorably act on their applications for TRO and so had their plans in placerdquo

Coronarsquos Answer also denied the allegation that the Chief Justice (or the Court) violated the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing

The Corona impeachment

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
        3. Page 53
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                                1. Page 46 Off
Page 11: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

12

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoIn blitzkrieg fashionrdquo This was how the defense panel described the impeachment of Chief Justice Renato Corona by 188 of the 285 members of the House of Representatives last month Filed with the Senate before Christmas Coronarsquos Answer to the complaint added ldquoIt appears that [House] Members were expected to sign on being offered tangible rewards even if denied the opportunity to read the Articles of Impeachment and examine the evidence against CJ Coronardquo

That apparent haste has led to several petitions in the Supreme Court questioning the validity of the impeachment complaint The challenges are based primarily on Section 4 Rule 7 of the Rules of Court which requires that a complaint be ldquoverified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and beliefrdquo

Like the High Court petitions Coronarsquos Answer cited Rule 7 and argued that it is impossible for all the 188 representatives to have read the document before signing His response maintained

that ldquothe Impeachment Court may not proceed to trial on the basis of the Complaint because it is constitutionally infirm and defective for failure to comply with the requirement of verification verification is not a mere procedural rule but a constitutional requirementrdquo

There are widespread doubts that the legislators read the articles they signed Some signatories admitted signing without reading In a Philippine Daily Inquirer story Bayan Muna Partylist Representative Teodoro Casintildeo admitted that they were not allowed to see the articles Instead they watched a slide presentation on the charges

Two ruling party congressmen Tobias Tiangco of Navotas and Hermilando Mandanas of Batangas refused to sign because they were not given the opportunity to read the complaint One impeachment prosecutor Representative Rodolfo Farintildeas of Ilocos Norte did not sign for the same reason even though he had occasionally threatened the Supreme Court justices with

the Courtrsquos Internal Rules It argued that ldquothe Supreme Court en banc is not bound by the Member-in-Chargersquos recommendation As in any collegial body the decision of the majority prevailsrdquo And it is not unusual for the Court to grant TROs without hearing For these reasons the Court voting 8-5 granted the TRO and set oral arguments in a week

As to Serenorsquos claim that Corona distorted the Courtrsquos decision on the effectivity of the TRO the Answer pointed out that it was majority of the Court not Corona alone that decided the TRO was not suspended By a vote of 7-6 (the Answer misstated it as 9-4) the Court ruled that the TRO was

immediately executory though Arroyo had yet to comply with the SPA requirement (she was able to comply within the 5-day period)

Selected Issues Fr Bernas asks ldquoThe constitutionality of the restriction on the right to travel through DOJ Circular on HDOs is pending before the Court with the decision expected after New Year Should the Senate preempt the SC decision What is the import if any of the existence of a House Bill and a Senate Bill disempowering the DOJ The continuing effectivity of the TRO has been affirmed by the Supreme Court What power does the Senate have over it

A Verified Complaint Signed Sealed Delivered mdash and Read

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 12: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

13

The cenSEI Report bull January 16-22 2012

impeachment if they ruled against the administration

In a late December press conference the governing board of the Integrated Bar of the Philippines (IBP) which groups all lawyers in the country said that lawmakers who agreed to impeach Corona ldquodidnrsquot even see the complaintrdquo As to the Articles themselves the IBP board declared after two days of consultations with law school deans ldquoBy impeaching the Chief Justice based on collegial decisionshellip the 188 Congressmen have in effect arrogated upon themselves the power to interpret the laws which is a clear violation of separation of powers and judicial independencerdquo

In the House Reply to Chief Justice Coronarsquos Answer impeachment proponents cited six

counter-arguments to those who want the Articles dismissed for lack of verification Among them the Senate acceptance of the complaint the presumption of compliance with rules absent evidence of signatories not

reading the complaint and permission under the Rules of Court to dispense with verification ldquoin the interest of justicerdquo

The Reply added that the Constitution requires that the impeachment be filed not verified by one-third of the House Moreover ldquoeven assuming (without admitting) that some of the complainants may not have initially read the Impeachment Complaint sufficient time has passed by now to allow them to read it and withdraw their signatures if they find anything wrong

with it None of them has withdrawn their signatures and it can be deduced therefrom that they are standing by their original signatures and verificationrdquo

ARTICLE VIII Respondent betrayed the public trust andor committed graft and corruption when he failed and refused to account for the judiciary development fund (JDF) and special allowance for the judiciary (SAJ) collections

Prosecution Corona failed and refused to (1) report the status of the Judiciary Development Fund and the Special Allowance for the Judiciary (2) remit to the Bureau of Treasury SAJ collections (3) account for funds released and spent for unfilled positions in the Judiciary (4) remit

fiduciary funds in the amount of P538 billion and (5) correctly state the balance of the SAJ in the amount of P5595 million

Defense The Answer cites official records (1) Statement of Allotment Obligation and Balances for 2010 submitted to the Department of Budget and Management (DBM) (2) Reports of Collections and Disbursements on the JDF and the SAJ Fund given to the Commission on Audit (COA) the DBM the House and the Senate (3) Report of Collections and Disbursements on the Fiduciary Fund for 2008 and 2009 submitted to the Senate and (4) Report on the Utilization of Savings for 2008 and 2009 submitted to the Senate

The Corona impeachment

Congressmen can withdraw signatures ifthey find the

complaint wrong No one has

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
        3. Page 53
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                                1. Page 46 Off
Page 13: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

14

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Report on the JDF Corona invokes Section 3 Article VIII of the Constitution ldquoThe Judiciary shall enjoy fiscal autonomyrdquo Thus its accounts may only be examined audited and settled only after disbursement Whether JDF and SAJ vouchers for 2010 (the year Corona became Chief Justice) were reported to the resident COA auditor can easily be determined by checking with the records of the COA Corona then stated ldquothat all disbursement vouchers for the funds of the JDF and SAJ are submitted to the resident COA auditorrdquo

Remittance of SAJ CollectionsThe Answer cites RA 9227 empowering the Chief Justice to use the SAJ surplus for additional allowances to other court personnel Thus on January 13 2011 the Supreme Court and the DBM executed Joint Circular No 2004-1 providing that ldquocollection of the Judiciary from funds enumerated under items 211 and 212 above shall no longer be remitted to the National Treasury Instead these shall be deposited in an authorized government depository bank as may be determined by the Supreme Courtrdquo

Funds for unfilled positions in the Judiciary Corona highlights the constitutionally recognized power of the

Chief Justice under Section 25(5) Article VI which provides that ldquothe President the President of the Senate The Speaker of the House of Representatives the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriationsrdquo

How Corona realigned savings including those for unfilled positions in the Judiciary may be evaluated based on the Supreme Courtrsquos Statement of Allotment Obligation and Balances (SAOB) for 2010 submitted to the DBM Savings in 2008 and 2009 though not under Coronarsquos term as Chief Justice were also submitted to Congress during the 2011 budget hearing

Regarding unremitted fiduciary funds AM No 10-8-3-SC was also cited to clarify that the Chief Justice may notremit them to the Bureau of Treasury without authorization from Congress They are private property requiring a law to escheat or forfeit them in favor of the State The Answer also noted that these amounts were accumulated in 2009 one year before Corona became Chief Justice

Rep Niel Tupas Jr (Iloilo 5th District)

Chief public prosecutor Chairperson of the House Committee on Justice

Rep Joseph Emilio Abaya (Cavite 1st District)

Team manager of the prosecution Chairperson of the House Committee on Appropriations

Rep Giorgidi Aggabao (Isabela 4th District)

Lead prosecutor for Article III formerly with Siguion-Reyna Mon-tecillo and Ongsiako former reviewer in commercial law in Far Eastern University

Rep Arlene ldquoKakardquo Bag-ao (Akbayan party-list)

Lead prosecutor for Article IV served as lead counsel for the Sumi-lao farmers

Prosecution Panel

IN THIS CORNER

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 14: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

15

The cenSEI Report bull January 16-22 2012

The Corona impeachment

Rep Elpidio Barzaga Jr (Cavite 2nd District)

Lead prosecutor for Article V Chairperson of the House Commit-tee on Suffrage and Electoral Reforms

Rep Neri Colmenares (Bayan Muna party-list)

Lead prosecutor for Article VII former secretary-general for the National Union of Peoplesrsquo Lawyers

Rep Raul Daza (Northern Samar 1st District)

Lead prosecutor for Article I Deputy Speaker of the House served as senior defense counsel in the impeachment trial of for-mer President Joseph Estrada

Rep Rodolfo Farintildeas (Ilocos Norte 1st District)

Lead prosecutor for Article VI Vice-Chairperson of the House Committee on Justice the only public prosecutor who did not sign the impeachment complaint

Rep Reynaldo Umali (Oriental Mindoro 2nd District)

Lead prosecutor for Article VIII former Deputy Customs Commissioner

Rep Marlyn Primicias-Agabas (Pangasinan 6th District)

Lead prosecutor for Article II Chairperson of the House Committee on Revision of Laws

Rep Sherwin Tugna (Citizensrsquo Battle Against Corruption party-list)

Secondary prosecutor for Articles III and IV formerly with Angara Abello Concepcion Regalla and Cruz

Atty Mario Bautista Founding partner of Poblador Bautista and Reyes

Atty Joseph Joemer Perez Associate in Poblador Bautista and Reyes

Justice Serafin Cuevas Retired Associate Justice of the Supreme Court

Atty Jacinto D Jimenez Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty German Lichauco II Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Jose M Roy III Former president of the Pamantasan ng Lungsod ng Maynila Partner in Roy Syquia and Corominas

Atty Dennis P Manalo Partner in Siguion Reyna Montecillo amp Ongsiako

Atty Ramon Esguerra Undersecretary of Justice under the Ramos Administration Managing partner in Esguerra amp Blanco

Atty Tranquil Salvador III Former dean of Pamantasan ng Lungsod ng Pasay Law School Partner in Romulo Mabanta Buenaventura Sayoc and De los Angeles

Atty Karen Olivia Jimeno Associate in Quisumbing Torres

Defense Panel

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                                1. Page 46 Off
Page 15: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

16

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

ldquoMy heart is in the right place and its loyalty is to the Constitution alonerdquo So declared Chief Justice Renato Corona in upon taking his oath of office as 23rd Chief Justice of the Philippines

Senator Franklin Drilon disagrees In late November he issued a press release urging Corona ldquoto inhibit himself from deliberations on the cases involving the former president to avoid doubts on the impartiality and objectivity of the Supreme Courtrdquo The senator and former Justice Secretary then criticized the Chief Justicersquos ldquojudicial recordrdquo for having ldquoconsistently voted in favor of former President Gloria Macapagal-Arroyordquo in 19 cases brought before the Supreme Court and enumerated on the Senate website

The impeachment complaint also alleged partiality and in his Answer Corona cited an independent study by legal academics Nuno Garoupa of the University of Illinois at Urbana-Champaign and Laarni Escresa Guillermo of the Universitat Hamburg to juxtapose his votes with those of two other Justices who served the Arroyo Administration before they were elevated to the High Court

Judicial Politics in Unstable Democracies The Case of the Philippine Supreme Court an Empirical Analysis 1986-2010 investigated judicial behavior in 125 High Court cases from 1986 to 2010 to show alignment between individual Justices and the interests of appointing Presidents Citing the Guillermo-Garoupa paper Coronarsquos Answer points out ldquothat Justice Antonio Carpio who served as GMArsquos Chief Presidential Legal Adviser cast 19 pro-administration votes as against 11 anti-administration votes or around 66 pro-GMA votesrdquo It was also noted that ldquoJustice Arturo Brion who served as GMArsquos Labor Secretary cast 5 pro-administration votes against 8

anti-administration votes or around 33pro-GMA votesrdquo For his part Corona ldquocast 8 pro-administration votes against 28 anti-administration votes or around only 29 pro-GMA votesrdquo This study according to Coronarsquos Answer ldquoreveals that no conclusive evidence exists to support the allegations of Complainantsrdquo Note that the Guillermo-Garoupa study covered 125 Supreme Court decisions in a span of 24 yearsmdashfar more comprehensive than Drilonrsquos 19 pre-selected cases which we will now look into

This discourse will digest the facts issues rulings and voting patterns in these 19 cases to provide a factual basis in assessing accusations of partiality against the CJ In the decision voting lists Coronarsquos name is highlighted in bold along with those of Justices Antonio Carpio and Conchita Carpio Morales who are by contrast reputed to have often voted against the Arroyo Administration The Drilon-curated cases

Early in his term President Benigno Aquino III issued Executive Order 1 creating a Truth Commission tasked to conduct a thorough fact-finding

Tilting the Scales of JusticeHow the Supreme Court voted in Arroyo-related cases

CASE 1 Corona concurred in the Dec 7 2010 SC ruling declaring President Aquinos order creating the Truth Commission unconstitutional

Louis Biraogo vs Truth Commission Edcel Lagman vs Paquito OchoaGR No 192935 193036 December 7 2010 per J Jose MendozaCJ Corona filed his own concurring opinion

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
        3. Page 53
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Page 16: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

17

The cenSEI Report bull January 16-22 2012

investigation of reported cases of graft and corruption involving third level public officials during the previous administration

Main Issue Whether the PTC mandate to investigate ldquoreported cases of graft and corruption during the previous administrationrdquo only transgresses the guarantee of equal protection under the law

Ruling Voting 10-5 the Court struck down EO 1 for violating the equal protection clause enshrinedin Section 1 Article III of the Constitution As observed by Justice Mendoza ldquothe intent to single out the previous administration is plain patent and manifestrdquo since ldquomention of it has been made in at least three portions But the ruling also suggested a way out extend the PTC mandate to all past regimes

The Corona impeachment

Supreme Court Justice(by seniority)

Appointing President

Votingvs

Arroyo

Voting for Arroyo

Percent for Arroyo

Davide Hilario Jr CAquino 2 3 6000Puno Reynato Ramos 8 6 4286Vitug Jose Ramos 2 1 3333Panganiban Artemio Ramos 3 6 6667Quisumbing Leonardo Ramos 4 11 7333Ynares-Santiago Consuelo Estrada 8 7 4667Sandoval-Gutierrez Angelina Estrada 6 5 4545Carpio Antonio Arroyo 10 8 4444Austria-Martinez Ma Alicia Arroyo 9 7 4375Corona Renato Arroyo 0 17 10000Carpio Morales Conchita Arroyo 10 8 4444Callejo Romeo Sr Arroyo 4 6 6000Azcuna Adolfo Arroyo 7 5 4167Tinga Dante Arroyo 1 15 9375Chico-Nazario Minita Arroyo 2 11 8462Garcia Cancho Arroyo 1 6 8571Velasco Presbiterio Jr Arroyo 0 13 10000Nachura Antonio Eduardo Arroyo 1 7 8750Reyes Ruben Arroyo 2 2 5000Leonardo-De Castro Teresita Arroyo 1 6 8571Brion Arturo Arroyo 2 3 600Peralta Diosdado Arroyo 0 2 -Bersamin Lucas Arroyo 0 3 -Del Castillo Mariantildeo Arroyo 0 2 -Abad Roberto Arroyo 1 0 -Villarama Martin Jr Arroyo 1 1 -Perez Jose Arroyo 0 2 -Mendoza Jose Arroyo 0 2 -Sereno Ma Lourdes B Aquino 1 0 - incumbent Justices

TAKING SIDES IN THE DRILON 19

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 17: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

18

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Dissent Senior Justice Carpio disagreed that EO 1 violates the equal protection clause arguing that ldquoto prioritize [the Arroyo administration] based on reasonable and even compelling grounds is not to discriminate but to act sensibly and responsiblyrdquo He added Surely there is no violation just because the authorities focus their investigation or prosecution on one particular alleged law-breaker for surely a person accused of robbery cannot raise as a defense that other robbers like him all over the country are not being prosecutedrdquo

PTC Unconstitutional 10 votes R Corona P Velasco T Leonardo-De Castro A Brion D Peralta M Del Castillo L BersaminM Villarama J Perez J Mendoza

PTC Constitutional 5 votes A Carpio C Carpio Morales A Nachura R Abad M Sereno

Arroyo-appointees Eddie Tamondong Cheloy Velicaria-Garafil and Bai Omera Dianalan-Lucman asked the Supreme Court to nullify Aquinorsquos EO 2 ldquorecalling withdrawing and revoking appointments issued by the previous administration in violation of the constitutional ban on midnight appointmentsrdquo Dianalan-Lucman also filed an Urgent Motion to Issue Status Quo Order to prevent the Malacantildeang from removing her from office while her case is pending The Court granted the motion Note that the status quo ante order only applied to her not to all allegedly midnight appointees

Grant Status Quo Order 12 votes no dissentR Corona C Carpio Morales A Nachura P Velasco T Leonardo-De Castro A Brion L Bersamin M Del Castillo M Villarama J Perez J Mendoza M Sereno

Republic Act 9716 created a new legislative district in Camarines Sur from five municipalities of the first district and two municipalities of the second district enabling Arroyo son Diosdado and her partymate Rolando Andaya Jr to run in separate districts But the law left the original first district with a population of 176383

Then Senator Aquino and then Naga City Mayor Jesse Robredo questioned the reconfiguration for violating Section 5(3) Article VI of the Constitution ldquoEach city with a population of at least two hundred fifty thousand or each province shall have at least one representativerdquo

Main Issue Whether RA 9716 violated the Constitution by leaving a legislative district with a population of less than 250000

Ruling Justice Perez highlighted the use by the Constitution of a comma to separate the phrase ldquoeach city with a population of at least two hundred fifty thousandrdquo from the phrase ldquoor each provincerdquo to show that the 250000 minimum population is required for a city but not a province or any new district carved out of a province

CASE 2 Oct 10 2010 status quo order stopping the Aquino Administration from revoking the appointment of an alleged Arroyo midnight appointee

Dianalan-Lucman vs Paquito OchoaGR No 193519 October 12 2010 not decided yet

CASE 3 April 7 2010 ruling denying the petition of then Sen Aquino against Republic Act 9716 creating a fifth congressional district in Camarines Sur

Benigno Aquino III vs Commission on ElectionsGR No 189793 April 7 2010 per Justice Jose Perez

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 18: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

19

The cenSEI Report bull January 16-22 2012

Main Dissent Senior Justice Carpio contended that despite the text of section 5(3) the constitutional mandate of Section 5(1) still requires that districts in provinces be apportioned ldquoin accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratiordquo

This means that allowing a district with a population of less than 250000 will ldquocreate a special class of legislative districts represented by a new political elite exercising more legislative power than their votes commandrdquo

RA 9716 Constitutional 9 votes R Corona P Velasco A Nachura T Leonardo-De Castro D Peralta L Bersamin M Del Castillo J Perez J Mendoza

RA 9716 Unconstitutional 5 votes R Puno A Carpio C Carpio Morales A Brion M Villarama

On November 5 2001 the Ombudsman charged Benjamin ldquoKokoyrdquo Romualdez with violation of the Anti-Graft and Corrupt Practices Act (RA 3019) for accepting double compensation as ambassador to China Saudi Arabia and the United States while serving as governor of Leyte till 1986 Romualdez wanted the case quashed on two grounds (1) the elements of corruption under of RA 3019 were not present and (2) the case was filed long after the 15-year prescription period had lapsed

The Sandiganbayan rejected Romualdezrsquo argument of prescription but still quashed the case based on the first ground Since the ruling was favorable to him Romualdez did not appeal The prosecution then went to the Supreme Court

In its first decision dated July 23 2008 the Supreme Court ordered the continuation of the trial Romualdez then filed a motion for reconsideration on the ground that the crime had already prescribed

Main Issue Whether Romualdezrsquos MR can invoke prescription when he did not appeal the Sandiganbayanrsquos ruling against it

Ruling Majority of the Court believed Romualdez cannot be faulted for not appealing the prescription aspect of the Sandiganbayan ruling since the case was dismissed anyway As Justice Tinga puts it ldquoWhy would he challenge a ruling favorable to him No lawyer would conceivably give such advise to his clientrdquo Thus the Court granted the motion and quashed the case due to prescription

Main Dissent Justice Brion said the majority ruling ldquorendered uncertain the state of final decisions of this Court if only because exceptions at will may now be possible and one has in fact been applied to the present caserdquo

Romualdez MR Granted 8 votes R Puno C Ynares-Santiago M Austria-Martinez R Corona D Tinga P Velasco A Nachura L Bersamin

Romualdez MR Not Granted 4 votes A Carpio C Carpio Morales M Chico-NazarioA Brion

The Corona impeachment

CASE 4 Decision reversing its previous decision ordering the Sandiganbayan to try former congressman Benjamin ldquoKokoyrdquo Romualdez whose son was supposedly an Arroyo ally

People of the Philippines vs Benjamin RomualdezGR No 166510 April 29 2009 per T Tinga

CASE 5 Feb 11 2009 decision upholding the Visiting Forces Agreement (VFA) but voiding a Philippines-US accord allowing US

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 19: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

20

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issues (1) Whether the Visiting Forces Agreement is constitutional and assuming that it is (2) Whether the Romulo-Kenney Agreement transferring Smith to embassy custody complied with the VFA

Ruling The majority sustained the VFArsquos constitutionality in line with the Courtrsquos previous ruling in Bayan vs Ronaldo Zamora However the Court ruled that the accord to jail Smith in the embassy went against section 10 of the VFA It requires ldquodetention by Philippine authoritiesrdquo which confinement in the US Embassy is not

Main Dissent Then Chief Justice Puno and Justice Carpio argued against VFA constitutionality because the US Senate did not ratify the Agreement the same way our Senate did Thus the two magistrates viewed any accord under the VFA to be invalid

VFA Constitutional but No Embassy Detention 8 votes L Quisumbing C Ynares-Santiago R Corona A Azcuna D Tinga M Chico-Nazario P Velasco T Leonardo-De Castro

VFA Unconstitutional and No Embassy Detention 4 votes R Puno A Carpio M Austria-Martinez C Carpio Morales

Main Issue Whether the creation of a Bangsamoro ldquoassociated staterdquo and the guarantee of ldquoamendment of the legal frameworkrdquo under the Memorandum of Agreement on Ancestral Domain violated the Constitution A secondary issue Whether the Court should rule on the case even after the MOA-AD was scrapped

Ruling Voting 9-6 the Court held that the MOA-AD provisions were unconstitutional even though the government had voided the Memorandum According to Justice Carpio Morales ldquothe Constitution does not recognize any state within this country other than the Philippine State much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independencerdquo Likewise the Court invalidated government guarantees to enact needed constitutional amendments According to the Court the Peace Panel and even the President could not make such commitments because they do not have the power to propose amendments Main Dissent Since the government did not sign the MOA-AD Justice Tinga argued that the case was moot so no ruling was needed

MOA-AD Unconstitutional 9 votes R Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna R Reyes T Leonardo-De Castro

serviceman and rape convict Daniel Smith to be detained in the American Embassy

Suzette Nicolas vs Alberto RomuloGR No 175888 Feb 11 2009 per J Adolfo AzcunaJ Corona concurred with J Azcuna

CASE 6 Corona dissented in the October 14 2008 decision declaring unconstitutional the Memorandum of Agreement on

President Arroyos peace negotiators and the Moro Islamic Liberation Front (MILF)

Province of North Cotabato vs Government Peace Panel on Ancestral DomainGR No 183591 October 14 2008 per J Conchita Carpio-MoralesJustice Corona joined Justice Tingarsquos dissenting opinion

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 20: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

21

The cenSEI Report bull January 16-22 2012

CASE 8 March 25 2009 ruling that then SSS Chairman Romulo Neri was not liable for contempt for declining to give certain testimony in Senate hearings on the NBN-ZTE scandal because his testimony was covered by executive privilege

Romulo Neri vs Senate Committee on Accountability of Public OfficersGR No 180643 September 4 2008 per J Teresita Leonardo-de CastroJustice Corona filed his own concurring opinion

Moot Case andor MOA-AD was constitutional 6 votes R Corona D Tinga M Chico-Nazario P Velasco A Nachura A Brion

Main Issue Whether there is sufficient public interest involved in the JPEPA negotiations to justify disclosure of the documents related to such negotiations

Ruling The Court upheld confidentiality following the rule that secrecy of negotiations can be set aside only if disclosure is needed for the petitioner to fulfill some responsibility The petitioning partylist groups failed to show that need

Main Dissent Chief Justice Puno argued that the government claimed confidentiality ldquoduring the negotiationrdquo Afterward ldquothe reasons for invoking the diplomatic secrets privilege while the JPEPA negotiations were ongoing no longer holdrdquo

JPEPA Negotiation Papers Confidential 10 votesL Quisumbing A Carpio R Corona C Carpio Morales D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro

JPEPA Negotiation Papers Not Confidential 4 votesR Puno C Ynares-Santiago M Austria-Martinez A Azcuna

Main Issue Whether the three Senate questions Neri refused to answer were covered by executive privilege which accorded confidentiality to the Presidentrsquos discussions with Cabinet officials executive sessions of Congress and Supreme Court deliberations

Ruling Voting 9-6 the Court ruled thatthe three questions were covered by presidential communications privilege validly invoked by the Executive branch That shielded Neri from any Senate arrest for not answeringthe questions

Main Dissent Chief Justice Puno opined thatthe Executiversquos claim to confidentiality must give way to the Senatersquos power of inquiry He reasoned that in Nerirsquos case ldquothe strength of [executive] privilege is weakened by the fact that the subject of the communication involves a contract with a foreign loan a power not exclusively vested in the President but is shared with the Monetary Board of the Central Bankrdquo

Nerirsquos Arrest Illegal 9 votes L Quisumbing R Corona D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

The Corona impeachment

CASE 7 July 16 2008 decision declaring negotiation records for the 2006 Japan-Philippines Economic Partnership Agreement were covered by executive privilege and not subject to public disclosure

Akbayan Citizens Action Party vs Thomas AquinoGR No 170516 July 16 2008 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
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                                1. Page 46 Off
Page 21: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

22

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Nerirsquos Arrest Valid 6 votes R Puno C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales A Azcuna

In 2005 when the purported wiretapped phone conversations were made public Justice Secretary Raul Gonzales warned media that those possessing or broadcasting the recording could be arrested immediately and held liable under the Anti-Wiretapping Act (RA 4200) Later on the National Telecommunications Commission (NTC) warned radio and TV stations ldquothat their broadcastairing of such false information andor willful misrepresentation shall be just cause for the suspension revocation andor cancellation of the licenses or authorizations issued to the said companiesrdquo

Main Issue Whether the warnings of Sec Gonzales and the NTC violate the constitutional freedoms of expression and of the press

Ruling Nullifying the DOJ and NTC warnings the Court ruled that ldquonot every violation of a law will justify straitjacketing the exercise of freedom of speech and of the pressrdquo According to Chief Justice Puno even assuming that the Anti-Wiretapping Act was violated it would have only ldquoan adverse effect on a personrsquos private comfort but does not endanger national securityrdquo Violation of the law by media is not

enough to support suppression of free speech and free press

Main Dissent Justice Corona joined Justice Nachurarsquos view that the warnings were valid because ldquoexisting laws authorize the revocation of licenses of broadcast stations if they are found to have violated penal laws or the terms of their authorityrdquo

DOJNTC Warnings Unconstitutional 10 votes R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna D Tinga R Reyes

DOJNTC Warnings Constitutional 5 votes R Corona M Chico-Nazario P Velasco A Nachura T Leonardo-De Castro

Main Issue Whether Presidential Proc 1017 is unconstitutional for (1) being an excessive exercise of the Commander-in-Chiefrsquos powers (2) requiring obedience to presidential decrees (3) delegating to the President the power to take over privately owned public utilities and (4) allowing warrantless arrests searches and seizures during thenational emergency

Ruling The Court ruled that (1) Proc 1017 was a valid exercise of the Commander-in-Chiefrsquos power to

CASE 10 Corona dissented in the May 3 2006 decision declaring ldquopartly constitutional partly unconstitutionalrdquo Arroyos Proclamation 1017 which placed the country under a state of national emergency in March 2006

Randolf David vs Gloria Macapagal-ArroyoGR No 171396 May 3 2006 per J Angelina Sandoval-GutierrezJ Corona joined J Tingarsquos dissenting opinion

CASE 9 Corona dissented in the February 15 2008 decision allowing broadcast of the recorded conversation allegedly between then President Arroyo and Election Commissioner Virgilio Garcillano Jr

Francisco Chavez vs Raul GonzalesGR No 168338 February 15 2008 per CJ Reynato PunoJ Corona joined J Nachurarsquos dissenting opinion

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
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                              1. Button 20
                                1. Page 46 Off
Page 22: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

23

The cenSEI Report bull January 16-22 2012

call out the Armed Forces (2) It was unconstitutional in giving the President the power to issue ldquodecreesrdquo to enforce obedience to all laws even those not related to lawless violence and to impose standards or prior restraint on media (3) Proc 1017 validly declared a state of national emergency but unconstitutional in granting the President the power to ldquotake overrdquo private businesses (4) Lastly warrantless arrests the violent dispersal of rallies and warrantless searches and seizures on media offices violated the right to peaceful assembly and the freedom of expression and of the press

Main Dissent Justice Tinga concurred in by Justice Corona did not join the majority in declaring unconstitutional some portions of Proc 1017 He argued that the provisions on ldquodecreesrdquo and ldquotake overrdquo were ldquopaper tigersrdquo that could not be exercised in fact Tinga also disagreed with the majorityrsquos declaration that certain arrests searches and seizures were illegal because the ruling was based on ldquoobvious facts and not on proven factsrdquo

Proc 1017 Partly Unconstitutional 11 votes A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales A Azcuna M Chico-Nazario C Garcia R Callejo

Proc 1017 Constitutional 3 votes R Corona D Tinga P Velasco

Main Issue Whether the proposed peoplersquos initiative complied with the requirements to amendrevise the Constitution

Ruling A deeply divided Supreme Court ruled that the Lambino petition ldquomiserably failed to comply with the basic requirements of the Constitution for conducting a peoplersquos initiativerdquo The most important failure is that the changes sought were not specific ldquoamendmentsrdquo for which the peoplersquos initiative was allowed but major ldquorevisionsrdquo which only Congress or a constitutional convention could propose Under Article XVII peoplersquos initiative can only be done to ldquoamendrdquo not to ldquoreviserdquo Notably then Chief Justice Artemio Panganiban voted with the majority while his eventual successor Reynato Puno dissented As explained by Justice Carpio revision alters a basic principle or affects substantial provisions of the Constitution while amendment refers to a change that does not alter the basic principle involved By any legal test a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system which involves the abolition of the Office of the President and the Senate is beyond doubt a revision not a mere amendment

Another failure of the Lambino petition is the absence of the text and a detailed explanation of the proposed amendment on the signature sheets Justice Carpio argued ldquoAn initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception and can operate as a gigantic fraud on the peoplerdquo

Coronarsquos Dissent Justice Corona disagreed with the majority He opined that the Court ldquocannot unnecessarily and unreasonably restrain the peoplersquos right to directly propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and other grammatical but insignificant omissionsrdquo

Sigaw ng Bayan Initiative Unconstitutional 8 votes A Panganiban C Ynares-Santiago A Sandoval-

The Corona impeachment

CASE 11 Corona dissented in the October 25 2006 decision dismissing the petition of Sigaw ng Bayan to allow a peoples initiative to amend the Constitution for failure to follow correct procedures

Raul Lambino vs Commission on ElectionsGR No 174153 October 25 2006 per Justice Antonio CarpioJ Corona filed his own dissenting opinion

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 23: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

24

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Gutierrez A Carpio M Austria-Martinez C Carpio Morales R Callejo A Azcuna

Sigaw ng Bayan Initiative Constitutional 7 votes R Puno L Quisumbing R Corona D Tinga M Chico-Nazario C Garcia P Velasco

Main Issues (1) Whether the President can validly prevent members of the Armed Forces from testifying before congressional hearings and (2) Whether the violation of such an order could lead to court-martial proceedings against the disobeying officers

Ruling (1) A unanimous Supreme Court recognized the Presidentrsquos constitutional authority to prevent military officers to attend congressional hearings neither because of executive privilege nor EO 464 (to be discussed in the next case) but by virtue of her power as commander-in-chief (2) As a consequence a military officer who defies an order prohibiting his attendance in such hearing may be held liable under military justice ie court-martial proceedings

As Justice Tinga aptly puts it ldquoObedience and deference to the military chain of command and the President as commander-in-chief are the cornerstones of a professional militaryrdquo and ldquobeyond the sway of the officers own sense of what is prudent or rash or more elementally of right or wrongrdquo

ldquoGAG ORDERrdquo VALID 13 votes no dissentA Panganiban R Puno L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez C Carpio Morales D Tinga R Callejo M Chico-Nazario C Garcia P Velasco

Note that Justice R Corona did not vote in this case because he was on leave Drilon claimed Corona concurred in the decision

On September 2005 the Senate invited various officials of the executive department to appear in the public hearing on the alleged overpricing and other unlawful provisions of the North Rail Project contract

Before any of the invited officials could appear President Arroyo issued EO 464 instructing that ldquoall heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congressrdquo

Main Issue Whether EO 464 contravenes the congressional power of inquiry

Ruling The Court unanimously refused to strike down EO 464 in its entirety In upholding the Presidentrsquos power to prohibit executive officials from appearing before congressional inquiries Justice Carpio Morales clarified the distinction between

CASE 13 Corona concurred in the April 20 2006 SC decision upholding the controversial gag order known as Executive Order 464 which allowed Malacantildeang and other executive officials to invoke executive privilege in refusing to testify in congressional investigations

Senate of the Philippines vs Eduardo ErmitaGR No 169777 April 20 2006 per J Conchita Carpio MoralesJ Corona concurred with J Carpio Morales

CASE 12 The Aug 15 2006 decision upholding President Arroyos order barring executive and military officials from appearing before congressional investigations without the Presidents consent The case was filed by then Marine General Francisco Gudani against the Armed Forces Chief of Staff who enforced the Presidentrsquos order

Francisco Gudani vs Generoso SentildegaGR No 170165 August 15 2006 per J Dante Tinga

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
        3. Page 53
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Page 24: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

25

The cenSEI Report bull January 16-22 2012

Sections 21 and 22 of Article VI of the Constitution Section 21 relates to the power to conduct inquiries in aid of legislation Attendance here is mandatory because its aim is to elicit information that may be used for the enactment of laws On the other hand section 22 pertains to the power to conduct a ldquoquestion hourrdquo in pursuit of Congress oversight function over the Executive branch

During this so-called question hour Congress merely seeks to be informed on how department heads are implementing the laws it had enacted and its right to such information is not as imperative as that of the President to whom such department heads must give a report of their performance as a matter of duty

In keeping with the principle of separation of powers section 22 states that Congress may only request their appearance Considering that EO 464 was limited in its application to section 22 the Court saw no reason to declare it unconstitutional

Nonetheless the Court nullified section 3 in relation to section 2(b) of EO 464 because under these provisions the determination of who are covered by executive privilege were left to ldquothe judgmentrdquo of the department heads the AFP Chief of Staff the PNP Chief the National Security Adviser and the President

Because of the highly exceptional nature of executive privilege the Court decided to limit to the President and the Executive Secretary (by order of the President) the right to invoke the privilege In other words the President may not authorize her subordinates (except the Executive Secretary) to exercise such power

EO 464 Partly Unconstitutional 14 votes no dissent A Panganiban L Quisumbing C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia P Velasco

In 2005 President Arroyo issued EO 420 directing all government agencies and government-owned and controlled corporations to adopt uniform data collection and a uniform format for their existing identification (ID) systems Some leftist partylist groups questioned the constitutionality of the executive order for disregarding jurisprudence laid down in Blas Ople vs Ruben Torres where the Supreme Court rejected the National ID System introduced by then President Fidel Ramos

Main Issues (1) Whether the President usurped legislative power by issuing EO 420 and (2) Whether EO 420 infringes on the right to privacy

Ruling (1) The Court unanimously ruled that the President did not usurp legislative powers because the unified ID under EO 420 can be implemented through a mere executive issuance since the information required are commonly collected and voluntarily given (hence Ople vs Torres did not apply) Justice Carpio noted ldquoAny person who applies for or renews a driverrsquos license provides to the LTO all these 14 specific datardquo (2) The Court also held that EO 420 does not infringe upon the right to privacy since the unified ID required less personal data with stricter safeguards than existing government ID systems

Justice Carpio even observed that ldquoAll these years the GSIS SSS LTO Philhealth and other government entities have been issuing ID cards in the performance of their governmental

The Corona impeachment

CASE 14 The April 19 2006 cases declaring valid President Arroyos EO 420 setting a national identification card policy

Kilusang Mayo Uno vs National Economic Development AuthorityGR No 167798 April 19 2006 per J Antonio CarpioJ Corona concurred with J Carpio

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 25: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

26

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

functionsrdquo and there ldquohave been no complaints from citizens that the ID cards of these government entities violate their right to privacyrdquo If there had been no complaints against the previousexisting ID systems then there is ldquoeven less basis to complain against the unified ID system under EO 420rdquo

EO 420 Constitutional 12 votes no dissent A Panganiban L Quisumbing A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga M Chico-Nazario C Garcia P Velasco

Main Issue Whether the President can appoint acting secretaries without the consent of the Commission on Appointments while Congressis in session

Ruling Since a department secretaryrsquos post may become vacant while Congress is in session the entire Supreme Court agreed that ldquothe President must necessarily appoint an alter ego of her choice as acting secretary before the permanent appointee of her choice could assume officerdquo Justice Carpio further explained ldquoSince a department secretary is the alter ego of the President the acting appointee to the office must necessarily have the Presidentrsquos confidencerdquo

Acting Appointments Valid 15 votes no dissentH Davide R Puno A Panganiban L Quisumbing

C Ynares-Santiago A Sandoval-Gutierrez A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga M Chico-Nazario C Garcia

In 2005 Congress enacted RA 9337 to amend the Value-Added Tax provisions of the National Internal Revenue Code (NIRC) One amendment granted ldquostand-by authorityrdquo to the President to raise the VAT rate to 12 when certain conditionsare fulfilled

Main Issue Whether the stand-by authority was an invalid delegation of the legislaturersquos power to tax Ruling The Court ruled that the stand-by authority was not a delegation of legislative power The rate increase was contingent on specified conditions not the prerogative of the President or the Secretary of Finance Justice Austria-Martinez explained ldquoNo discretion would be exercised by the Presidentrdquo She had to increase the rate to 12 once the Secretary of Finance determined that any of the two conditions were met

Main Dissent Justice Sandoval-Gutierrez dissented on the validity of the stand-by authority She opined that the President could control the conditions imposed by Congress ldquoif [the President]

CASE 16 The October 18 2005 decision declaring Republic Act 9337 also known as the VAT Reform Act as constitutional

ABAKADA GURO Partylist vs Eduardo ErmitaGR No 168056 September 1 2005 per Justice Ma Alicia Austria-MartinezJustice Corona joined the concurring and dissenting opinion of Justice Sandoval-Gutierrez

CASE 15 The October 13 2005 decision declaring that President Arroyo can make appointments ldquoin an acting capacityrdquo without seeking confirmation from the Commission on Appointments

Aquilino Pimentel Jr vs Eduardo ErmitaGR No 164978 October 13 2005per J Antonio CarpioJ Corona concurred with J Carpio

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        3. Page 53
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Page 26: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

27

The cenSEI Report bull January 16-22 2012

does not wish to increase the VAT rate she may discourage the Secretary of Finance from making the recommendation If she wishes to increase the VAT rate all she has to do is to strictly enforce the VAT collection so as to exceed the 28 ceiling The same holds true with the national government deficit The President will just limit government expenses so as not to exceed the 15 ceilingrdquo

Justice Corona voted in favor of Justice Sandoval-Gutierrezrsquo opinion that the Presidentrsquos stand-by authority was unconstitutional

ConcurredIn the ResultL Quisumbing A Carpio A Austria-Martinez C Carpio Morales M Chico-Nazario

Separate OpinionsA Panganiban C Ynares-Santiago

Separate Concurring and Dissenting OpinionsH Davide A Sandoval-Gutierrez R Puno R Corona A Azcuna D Tinga R Callejo C Garcia

On August 20 1939 American Bessie Kelley gave birth to Ronald Allan Kelley Poe (later to be known as Fernando Poe Jr or FPJ) No acknowledgment had been made by the father in the childrsquos birth certificate

A year later on September 16 1940 Bessie married the childrsquos putative father Allan Poe

According to records Allanrsquos father Lorenzo died on September 11 1954 at the age of 84 This leads to the conclusion that Lorenzo was born in 1870 and that he benefitted from the ldquoen masse Filipinizationrdquo under the Philippine Bill which took effect in 1902

Meanwhile on December 31 2003 FPJ filed his certificate of candidacy for President of the Philippines His qualification as a natural-born citizen was questioned

Main Issue Whether FPJ was qualified to run for President of the Philippines

Ruling The Court decided not to apply a statute that would have given FPJ his motherrsquos US citizenship due to the failure of his Filipino father Allan to sign his birth certificate as required by law The Court adopted the view of amicus curiae Fr Joaquin Bernas ldquoTo disqualify an illegitimate child from holding an important public office is to punish him for the indiscretion of his parentsrdquo The Court also noted that the 1935 Constitution explicitly states that ldquothose whose fathers are citizens of the Philippinesrdquo are natural-born citizens even if the parents are not married

Main Dissent Justice Corona agreed with Justice Carpio Morales that without Allan Poersquos signature on FPJrsquos birth certificate Allanrsquos paternity was not established Hence the citizenship provision in the 1935 Constitution could not be applied

FPJ Qualified to Run for President 8 votes H Davide R Puno J Vitug C Ynares-Santiago M Austria-Martinez A Sandoval-Gutierrez R Callejo A Azcuna

FPJ Qualified to Run for President 5 votes L Quisumbing A Carpio R Corona C Carpio Morales D Tinga

The Corona impeachment

CASE 17 Corona dissented in the March 2 2004 ruling dismissing petitions to disqualify then presidential aspirant Fernando Poe Jr on the ground that he was not a natural-born citizenMaria Jeanette Tecson vs Commission on Elections

GR No 161434 March 3 2004 per Justice Jose VitugJustice Corona joined J Carpio Moralesrsquo dissenting opinion

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                                1. Page 46 Off
Page 27: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

28

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Main Issue Whether the President has the power to declare a state of rebellion

Ruling Declaring a state of rebellion was among the commander-in-chief powers Explained Justice Tinga ldquoAt most it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress itrdquo While such declaration he added may bring upon ldquoemotional effects upon the perceived enemies of the State even on the entire nationrdquo it has no real effect since ldquothe mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rightsrdquo

Lone Dissent Believing that every presidential claim to a power must be scrutinized Justice Sandoval-Gutierrez dissented stressing ldquothere is no provision in our Constitution authorizing the President to declare a state of rebellionrdquo

The President Can Declare a State of Rebellion 12 votes H Davide R Puno J Vitug A Panganiban L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo D Tinga

The President Cannot Declare a State of Rebellion 1 vote A Sandoval-Gutierrez

Main Issue Whether the Comelec gravely abused its discretion in awarding the project to Mega-Pacific and Total Information Management Corp

Ruling Having awarded the contract without testing the software the Comelec not only abused its discretion but as Justice Panganiban said ldquoalso put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally-mandated technical requirementsrdquo

The Court declared unlawful the purchase of counting machines and the still-to-be-produced software as well as all payments made The Comelec was ordered to recover the funds paid out In addition the Ombudsman was told to investigate the contract for possible corruption

Main Dissent Justices Corona and Velasco joined Justice Tingarsquos dissenting opinion noting that none of the more than 50 losing bidders questioned the award Thus ldquothe losing bidders have conceded MPCrsquos eligibility and qualifications and deferred to the decision of the Comelec to award the Contractto MPCrdquo

CASE 18 The Feb 3 2004 decision declaring that President Arroyo did not exceed her powers in issuing Proclamation Nos 427 and 435 and General Order No 4 declaring a state of rebellion during the so-called Oakwood Mutiny

Sanlakas vs Angelo ReyesGR No 159085 February 3 2004 per

CASE 19 Corona dissented in the January 13 2004 decision voiding the election automation contract between the Commission on Elections and Mega-Pacific for lack of public bidding That derailed the Arroyo Administrationrsquos push for automated elections

Information Technology Foundation vs Commission on ElectionsGR No 159139 January 13 2004 per Justice Artemio PanganibanJustice Corona joined Justice Tingarsquos dissenting opinion

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                        2. Page 7
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Page 28: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

29

The cenSEI Report bull January 16-22 2012

CASE B Unanimous decision in Secretary of National Defense vs Manalo that ldquothe ineffective investigation and protection by government agents under the secretary of defense and the AFP failed to guarantee the right of security of respondents as required by the Constitutionrdquo

Secretary of National Defense vs Raymond and Reynaldo ManaloGR No 180906 October 7 2008 per CJ Reynato Puno

Mega-Pacific Contract Void 11 votes H Davide R Puno J Vitug A Panganiban L Quisumbing A Sandoval-Gutierrez C Ynares-Santiago A Carpio M Austria-Martinez C Carpio Morales R Callejo

Mega-Pacific Contract Valid 3 votes R Corona A Azcuna D Tinga

When Corona thumbed down ArroyoOn December 11 a day before the House of Representatives filed the impeachment complaint against Chief Justice Corona Court Administrator Midas Marquez published a statement to ldquoreassure the public that these claims [of impartiality] being cast against the Chief Justice and the Court are pure fantasy and baselessrdquo He cited cases where Corona voted to invalidate acts of the Arroyo Administration

Main Issue Whether the President validly issued Proc 310 taking 670 hectares of land from CMU in January 2003 in line with the governmentrsquos efforts to distribute land to indigenous peoples

Ruling The Court unanimously declared Proc 310 invalid for taking land already registered under the name of CMU The justices stressed that the land being taken had ldquobecome inalienable from the moment President Garcia dedicated them for CMUrsquos use in scientific and technological research in the

field of agriculture [in 1958] They have ceased to be alienable public landsrdquo

Proc 310 Invalid 9 votes no dissentR Corona A Carpio C Carpio Morales D Peralta L Bersamin M Del Castillo R Abad M Villarama J Perez

This case involves the very first petition for the issuance of a writ of amparo filed by brothers Raymond and Reynaldo Manalo against a number of military officials most prominent of which was MGen Jovito Palparan for alleged abduction forced disappearance and torture from February 2006 up to their escape in August 2007

Main Issue Whether the Manalo brothers were entitled to the issuance of a writ of amparo in their favor securing them against state intimidation and force

Ruling The Court agreed with the claim of the Manalo brothers that there was a violation of their right to security when they were abducted by armed men sufficiently identified as elements of the military The Court was also convinced that the reason behind the abduction was the militaryrsquos suspicion that the two were communist sympathizers

The Corona impeachment

CASE A Unanimous decision in Central Mindanao University vs Executive Secretary voiding Presidential Proclamation 310 that took property from a state university for distribution to indigenous peoples and cultural communitiesCentral Mindanao University vs Executive SecretaryGR No 184869 September 21 2010 per Justice Roberto Abad

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
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                            1. Page 46 Off
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                                1. Page 46 Off
Page 29: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

30

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

The Corona impeachment

Writ of Amparo Granted 15 votes no dissentR Puno L Quisumbing C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales A Azcuna D Tinga M Chico-Nazario P Velasco A Nachura R Reyes T Leonardo-De Castro A Brion

In 2001 President Arroyo issued EO 46 creating the Philippine Halal Certification Scheme and designating the Office of Muslim Affairs (OMA) to oversee its implementation OMA was given exclusive authority to issue halal certificates and perform other related regulatory activities Prior to this the Islamic Darsquowah Council of the Philippines (IDCP) was the private entity accredited by the Regional Islamic Darsquowah Council of Southeast Asia and the Pacific (RISEAP) to issue halal certifications in the country

Later on OMA warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could

contain pork or its derivatives OMA also sent letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate EO 46 and RA 4109

Main Issue Whether EO 46 violated freedom of religion by creating a state body with exclusive authority to issue halal certificates affirming thatfood was processed according to Muslim rules

Ruling Rejecting the governmentrsquos argument that religious freedom is subservient to the police power of the State the Court held that ldquoEO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption By arrogating to itself the task of issuing halal certifications the State has in effect forced Muslims to accept its own interpretation of the Qurrsquoan and Sunnah on halal foodrdquo

According to Justice Corona ldquoIf the governmentfails to show the seriousness and immediacy of the threat State intrusion is constitutionally unacceptable In a society with a democratic framework like ours the State must minimize its interference with the affairs of its citizens and instead allow them to exercise reasonable freedom of personal and religious activityrdquo

EO 46 Unconstitutional 13 votes no dissentH Davide J Bellosillo R Puno J Vitug A Panganiban C Ynares-Santiago A Carpio M Austria-Martinez R Corona C Carpio Morales R Callejo A Azcuna D Tinga

CASE C In Islamic Darsquowah Council of the Philippines vs Executive Secretary the Supreme Court nullified EO 46 issued on 26 October 2001

Islamic Darsquowah Council of the Philippines vs Executive SecretaryGR No 153888 July 9 2003 penned by Justice Renato Corona

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 30: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

31

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET

Govrsquot eyes work-from-home rationing amid looming fuel crisisThe Department of Energy is looking at possible measures to mitigate the effect of a looming fuel crisis in case the tension between Iran and the US escalates The government agency says that options include oil rationing as well as work-from-home schemes to minimize trips to the workplace and save on fuel

Tensions began after the US enforced new sanctions against Iran over the Arab countryrsquos continued refusal to stop its uranium enrichment program The sanctions curtail Iranrsquos ability to transact with international consumers of its oil In response Iran has threatened to block the Strait of Hormuz a strategic chokepoint in the Persian Gulf

Millions escort Black NazareneA mammoth crowd of devotees of the Black Nazarene in Quiapo Manila participated in the annual Translacion or procession of the

image from Quirino Grandstand to the Quiapo Church despite reports of terror threats The Philippine National Police has estimated that almost seven million people from all over the Philippines joined the procession which lasted twenty-two hours the longest in the history of the Traslacion

The Feast of the Black Nazarene is famous for the procession which attracts throngs of devotees praying for their needs and offering thanksgiving This devotion began in 1606 when the statue was reportedly brought to the Philippines by Augustinian Recollect friars

Its more fun in the PhilippinesThe new Department of Tourism slogan Its more fun in the Philippines launched last week is now the official campaign ad of the Philippine government to promote the countrys tourism and attract visitors into our shores This report from The Philippine Star says that the whole campaign which costs about P5 million intends to project the

Filipino trait of making things fun and memorable for tourists and visitors

The campaign includes this dedicated website from which tourists can gather information about the Philippines so that they could make the most out of their visit Palace stands by DFA in protesting Chinas incursionsMalacanang backs the diplomatic protest filed by the Department of Foreign Affairs against China for alleged incursions into the West Philippine Sea last month The Chinese countered saying that the Philippines accusations were groundless and hopes that the latter will not ldquocause disturbancesrdquo Foreign Affairs Secretary Albert del Rosario invites China to validate the respective claims of the two countries and resolve their issues based on the rules of the United Nation Convention on the Law of the Sea

The protest involves the reported December 11 and December 12 entry of Chinese civilian and naval vessels in the Escoda Shoal part of the contested Spratly Islands in the West Philippine Sea The Philippine government insists that the Escoda shoal is within the 200-mile exclusive economic zone of the Philippines

Nation

Caption

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
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            2. Page 6
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Page 31: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

32

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Huge digital opportunities await Philippine publishersBy Ricardo Saludo

New Ways of Printing Money

BUSINESS

STRATEGY POINTSDont dismiss the local digital market 30 million Filipinos have internet access with broadband doubling yearly

Use online bookstores print on demand and e-readers to boost book exports

Tap into global publishing services demand $4 billion a year just for textbooks

Digital publications are winning over more readers and advertisers

In the book The 100 A Ranking Of The Most Influential Persons In History Nos 7 and 8 are two inventors of print media The 15th-century German Johannes Gutenberg who invented printing came in at No 8 right behind the 1st-century Chinese eunuch Cai Lun the creator of paper

In justifying the high placement of Cai and Gutenberg above the likes of Columbus Einstein Galileo Aristotle and Moses scientist and author Michael H Hart noted that before Cai invented paper China was behind Mediterranean cultures in social and technological progress The latter had parchment and papyrus to communicate ideas and information while the Chinese used cumbersome woodblocks

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                                1. Page 46 Off
Page 32: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

33

The cenSEI Report bull January 16-22 2012

But after wood-pulp paper was invented China caught up with and passed the West in learning governance and technology This lead in development was maintained for centuries mdash until the Gutenberg press Then the West became the worldrsquos dominant civilization until today The lesson from history of course is that spreading and exchanging knowledge is the key to human progress

Today we have our own Cai Lun and Johannes Gutenberg Our modern-day Cais whose creations performed paperrsquos longtime task of recording manipulating and transmitting information are none other than the late Steve Jobs and his partner Stephen Wozniak Their Apple Computer Company started the personal computer revolution in 1976 and in the past decade Apple followed up that success with the iPhone and iPad Thus Jobs and Wozniak brought IT power to ordinary people

As for our 20th-century Gutenbergs we have another pair of innovators Vinton Cerf and Robert Kahn Also in the 1970s these American computer scientists developed the Internet Protocol technology of splitting information into millions of tiny packets transmitting them by different channels wired or wireless then reassembling the packets at their destination into the original text numbers sounds or images Thus Cerf and Kahn replicated Gutenbergrsquos feat of disseminating knowledge to masses of people

The digital revolution Threat or opportunity The big question for the publishing business of course is whether the innovations of Jobs Wozniak Cerf

and Kahn will bring an end to the industry founded on the inventions of Cai and Gutenberg Will digital platforms replace paper and ink and what threats and opportunities does such a scenario present to publishers in the country

Those who see more threats in the digital world than opportunities should pay attention to some recentnumbers mostly from Nielsen the media survey company

bull One-third of Filipinos have access to the Internet Thatrsquos 32 million people based on the projected 2011 population of about 96 million

bull Broadband capacity has been doubling yearly since 2009 reports data source Point Topic One-fourth of us are on Facebook according to Internetworldstatscom

bull Two out of every three teenagers aged 15-19 mdash more than 6 million youths mdash are online three-quarters of them using Internet cafes

bull Half of Filipinos in their 20s mdash another 8 million of our countrymen mdash also have access to the Net

bull One-fourth of Filipinos use their mobile phones to access the Internet and another 56 will do so by the middle of next year

Cai Lun

Steven Paul Jobs

Johannes Gutenberg

Stephen Gary Wozniak

Vinton Grey Cerf

Robert Elliot Kahn

New ways of printing money

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                                1. Page 46 Off
Page 33: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

34

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

If publishers can deliver highly engaging entertaining or educational online material to even a tiny fraction of the above consumer groups thatrsquos a mammoth market to have

bull For instance ₧10 a month from one out of every ten 15-to-19-year-olds online amounts to ₧72 million a year

bull If just one-half of 1 of Filipinos in their 20s took online courses at an average cost of ₧5000 a year thatrsquos a market of₧200 million

bull If 1 of those with home broadband purchase ₧1000 in online content annually that would gross half a billion pesos a year

And remember that there would be minimal printing and delivery expenses in generating those sales That would please both your accountants and Mother Nature

Tapping the global market mdash online But why stop at the national borders The great thing about the Internet is that it provides fast and cost-efficient access to the world market As TV5 Chairman Manuel V Pangilinan said in his speech to the 22nd

Advertising Congress last November ldquoWhen you put something on the

Net it is instantly globalrdquo

A decade ago a De La Salle University

report titled ldquoAn In-Depth Study on the Printing and Publishing Industry in the Philippinesrdquo already pointed out ldquoThe printing and

publishing industry

of the Philippines currently caters primarily to the domestic market but is slowly discovering a potential market abroad Some players particularly those that have the supply capability have realized that a much larger market exists abroad and that tapping this foreign market would increase their profitabilityrdquo

So how big is the global online market Internetretailercom publishes the Top 500 annual ranking of the largest online retailers in North America Last year total sales of companies in the list grew a robust 18 to $150 billion All e-commerce grossed $165 billion up 148 outstripping the 69 growth in total retail sales in the US and Canada Merchants selling only online hit $4847 billion in turnover skyrocketing 343

Top 500 topnotcher Amazoncom grew even faster in 2010 lifting net sales by nearly 40 to $342 billion Its North American business surged even faster by 461 to $187 billion Sales in the rest of the world werenrsquot far behind $155 billion up 325 Global sales of books music and videos managed a decent 164 rise to $149 billion

You can do your own sales potentials for Philippine-made content assuming they could garner tiny fractions of those mega-sales If our books could get even just 11000 of Amazonrsquos book music and video sales alone that would amount to $15 million or more than ₧645 million Many Philippine titles are on Amazon like those above on page 33

And there is no reason why we canrsquot produce books on US and other topics with mass appeal

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
            4. Page 10
            5. Page 12
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            26. Page 56
            27. Page 58
              1. Button 26
                1. Page 4 Off
                2. Page 6
                3. Page 8
                4. Page 10
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                6. Page 14
                7. Page 16
                8. Page 18
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                25. Page 54
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                27. Page 58
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                    1. Page 5 Off
                    2. Page 7
                    3. Page 9
                    4. Page 11
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                        2. Page 7
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                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 34: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

13

35

The cenSEI Report bull January 16-22 2012

e-Books No paper no shipping no problem What makes many publishers hesitate to venture into exports is the high cost of printing in the country and shipping books and periodicals abroad Which makes e-books a welcome option harnessing both the audiovisual and interactive power of computers and the Internet plus the cut-rate delivery cost of online distribution

Some publishers are already dabbling in e-books including those who attended the Future of the Book conferences on digital publishing held in September 2010 and last November at the University of the Philippines Bahay ng Alumni Vibal Publishingrsquos About Vee Press has pioneered e-books in the country with electronic versions of dozens of titles

Again the really lucrative market is abroad Consider Amazonrsquos Kindle one of a growing number of electronic readers on the market Founding boss Jeff Bezos says that for every 100 hardcover books Amazon sells 143 Kindle titles are sold Nielsen found

that nearly half of Kindle owners in the US earn $80000 a year and 27 have graduate degrees The New York Times

reported that eight out of every 10 American parents allow or encourage

their kids to use e-readers And there are iPad and

Android tablets not to mention laptops

and PCs

If US digital media trends are any indication

of how they would play out in other countries as those societies get more

wired then the future of books and periodicals is electronic The younger generation of Americans are avid readers of e-books

(see chart next page) so expect more and more

of the nation to pore over e-readers rather

than printed pages in the coming years and decades

Indeed consumers surveyed by US marketing consultancy Harrison Group for its 2010 study ldquoContent Consumption in the Digital Age Devices Distribution amp Desirerdquo see newspapers magazines and books being read in digital versions rather than hard copy in the near future

Philippine books on Amazoncom

Ready to read on e-readers

New ways of printing money

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
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                                1. Page 46 Off
Page 35: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

36

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

POD and BPO The world trade in publishing services Vee Press also offers its e-books via print on demand (POD) another burgeoning segment of digital publishing POD can produce books when they are ordered in print runs of one to 100 Print-on-demand machines can be expensive between $50000 to $250000 by one estimate The good news for those aiming to sell in the US and other advanced markets there are hundreds of POD outfits there so one can contract strategically situated printers to serve cities where say most Filipino-Americans live

According to one US publisher for a print run of 25-50 copies 10-20 must be sold to cover POD costs For 500 copies netting just $10 a book printing would cost $2000 leaving $3000 for content expenses Since many firms already have existing titles to convert to POD most of the $3000 would be profit Do that for 50 books and one could come away with $150000 or more if the copies net $15-$20 each and sales exceed 500 All that without shipping a single book abroad

A further business model besides online marketing e-books and print on demand is business process outsourcing for publishers abroad According to The Changing Face of Indian Publishing BPO Industry online

primer estimated earnings of the sector for India was $14 billion last year with annual growth in excess of 30 and employment of more than 70000 Services range from writing design and other aspects of content production to typesetting and related pre-press production services

For this year BPO opportunities in scientific-technical-medical (STM) publishing are valued at $17 billion while potential for services for other educational publishing is forecast at $4 billion Beyond learning materials there are also clientele among publishers of newspapers magazines phone books and corporate materials US newspaper publishing alone is believed to offer $4 billion in offshoring opportunity especially with revenue constraints forcing the press to cut costs to the bone

With 15000 technology graduates coming out of our higher learning institutions every year the Philippines has the expanding base of knowledge workers to get a decent slice of the global publishing BPO market But the Philippine potential is largely untapped with total turnover of possibly just $200 million today based on annual growth of 20-30 The countryrsquos workforce in the industry is estimated at one-fifth of Indiarsquos

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

READERS GO DIGITAL

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                        24. Page 55
                        25. Page 57
                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 36: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

37

The cenSEI Report bull January 16-22 2012

But we do have some of the biggest global players in knowledge process outsourcing such as PLDTrsquos SPi Global Innodata Asiatype and Xlibris operating in the country Last month SPi acquired an Indian publishing BPO firm Laserwords a recognized player among major US publishers with facilities in India and America

Whatrsquos lacking in Philippine BPO for publishing are middle-tier firms with 200-500 staff compared with 5000 for giants like SPi Thus two companies generate four-fifths of total industry turnover in the country compared with a dozen vendors in India More midsize firms will enable the country to snare smaller projects that tend to seek the substantial cost savings of outsourcing to Asia

Moreover the flexibility and speed of many small firms would be a further advantage in competing for BPO in publishing This midsize niche may be one that some of your firms may find a good and lucrative fit

e-Reading The future is here Nonetheless even with print on demand BPO for publishing and other enhancements of the Cai-Gutenberg paper printing technology electronic publishing may still the way to go for the future With broadband-linked tablets fast becoming as widespread and indispensable as cellphones more and more people will prefer digital books and periodicals with whole libraries and newsstands ready for reading on a

device smaller and lighter than a college dictionary

Many of you may have seen the Zinio and Pressmart digital magazine and newspaper platforms featuring established as well as new

publications The periodicals are presented in the same layout and paging as the printed versions but with clickable links to go to any page in the journal as well as to online material including advertisersrsquo websites Ads are not just still pictures but also video and audio The e-journals can be downloaded and read offline although online links require Internet connections to work

For Each Medium Shown Who Believe More Will Be Read DigitallyThan on Paper Within the next 5 years

Total Consumer Sample Tablet Users Dedicated eReader Users Industry Sample

5663 60 57

4756 55

44 41

58 55

33

Newspaper Magazines Books

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

AND PAPERLESS

Publishing BPO pioneers

New ways of printing money

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
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            5. Page 12
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            8. Page 18
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            11. Page 24
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            27. Page 58
              1. Button 26
                1. Page 4 Off
                2. Page 6
                3. Page 8
                4. Page 10
                5. Page 12
                6. Page 14
                7. Page 16
                8. Page 18
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                25. Page 54
                26. Page 56
                27. Page 58
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                    1. Page 5 Off
                    2. Page 7
                    3. Page 9
                    4. Page 11
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                    6. Page 15
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                    15. Page 35
                    16. Page 37
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                    18. Page 41
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                    20. Page 45
                    21. Page 47
                    22. Page 49
                    23. Page 51
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                    25. Page 57
                      1. Button 24
                        1. Page 5 Off
                        2. Page 7
                        3. Page 9
                        4. Page 11
                        5. Page 13
                        6. Page 15
                        7. Page 17
                        8. Page 19
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                        24. Page 55
                        25. Page 57
                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 37: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

38

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Probably because the e-publications use the familiar formats of their printed versions readers find digital journals more appealing and useful than the websites of

such news sources as seen from the survey results below from the 2010 report ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo by US online marketing consultancy Smarter Media Sales To find articles in an e-publication for instance a

reader uses the same table of contents and page numbers in the printed journal rather than having to figure out the websitersquos completely different navigation

The enhanced reader experience rubs off on the advertising too The same study reports that ads in interactive digital publications are more appealing to readers than those on websites with the same content Digital magazine ads got the nod from about 70-80 of readers across a range of attributes from being less intrusive and easier to read to having more authority credibility information and fun

Digital magazine ads give even broadcast commercials a run for their money Asked which types of advertising is interesting and useful 632 picked interactive magazine ads higher than all other ads including TV (534) and radio (348)

On the other hand survey respondents are more likely to ignore website pop-up ads (917) mobile phone and website banner ads (about 70) and emailed ads (63) But those more likely to ignore digital magazine ads comprise the lowest percentage at 217 Digital magazine advertising also draws the lowest percentage of respondents

who regard it as negative in their online or broadcast experience 165 vs 905 for website pop-up ads

International consulting firm FTI Consultingrsquos August study The

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

DIGITAL IS MORE FUN

CREDIBLE AND USEFUL

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
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            2. Page 6
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                        2. Page 7
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                                1. Page 46 Off
Page 38: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

39

The cenSEI Report bull January 16-22 2012

Effect of Tablet Use on US Content Consumptionrdquo reports ldquoBetween one-third to one-half of respondents report reducing or stopping their use of conventional media when provided online alternatives though the amount of substitution varies by age and (of course) by type of mediardquo Internet use is highest for news social networking and music

As for the future the Harrison survey expects digital ads to offer one-click purchasing which should offer sales commissions on top of ad fees to digital publishers For textbook publishers tablets will be the learning platform for the future mdash along with enhancing learning a boon to kids now struggling with bags full of heavy books And for book firms there could be greater competition to publish big-name talents the writers themselves who can now market and distribute their work globally through the Internet

The impact of Cai and Gutenberg on the development of civilizations underscored the power of technological advances in empowering those who develop and adopt them to overtake the laggards So do the impact of the innovations of Cerf and Kahn Jobs and Wozniak and a host of other modern-day Cais and Gutenbergs Let those be essential history lessons in innovation and competitiveness for those still unsure about the rapidly growing challenges and opportunities in digital publishing

RADIO TV OR DIGITAL

TUNING OUT ADS

2015 VISION

Use of internet to access media content in the US 2011YOUNG AND ONLINE

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo Smarter Media Sales (2010)

Chart from ldquoContent Consumption in the Digital Agerdquo Harrison Group (2010)

Chart from ldquoThe Case for Advertising in Interactive Digital Magazinesrdquo

This report was first presented to the Publishers Association of the Philippines Inc annual meeting in Boracay last December

Which forms of electronic advertising do you find helpful or interesting

Ads in digital magazinesTelevision adsRadio adsE-mail advertising in your inboxAds on e-mail newsletterWebsite banner adsWebsite pop-up adsAds on your mobile phone

632632

632

632 632632

632632

700

600

500

400

300

200

100

00

Which forms of electronic advertising do you ignore most of the time

Website pop-up adsAds on your mobile phoneWebsite banner adsE-mail advertising in your inboxAds on e-mail newsletterRadio adsTelevision adsAds in digital magazines

100

90

80

70

60

50

40

30

20

10

0

917

748 721653

531

352319

217

Things you think will happen within the next five years

5164

62

4263

49

2748

38

Advertising in digital publications will allow for one-clisk

product purchasing

Tab - based devices will be an integral part of the classroom

experience for children

Most well-known authors will publish their work privately

eReader UsersTablet UsersTotal Sample

New ways of printing money

New

sne

wsp

aper

Soc

ial N

etw

orks

Mus

ic

TV s

how

ep

isod

es

Gam

es

Spo

rts

Mov

ies

Mag

azin

es

741771

624

503761

407 384325

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
            4. Page 10
            5. Page 12
            6. Page 14
            7. Page 16
            8. Page 18
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            10. Page 22
            11. Page 24
            12. Page 26
            13. Page 28
            14. Page 30
            15. Page 32
            16. Page 34
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            27. Page 58
              1. Button 26
                1. Page 4 Off
                2. Page 6
                3. Page 8
                4. Page 10
                5. Page 12
                6. Page 14
                7. Page 16
                8. Page 18
                9. Page 20
                10. Page 22
                11. Page 24
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                18. Page 38
                19. Page 40
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                21. Page 44
                22. Page 48
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                25. Page 54
                26. Page 56
                27. Page 58
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                    1. Page 5 Off
                    2. Page 7
                    3. Page 9
                    4. Page 11
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                    25. Page 57
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                        1. Page 5 Off
                        2. Page 7
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                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 39: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

40

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

Learn from Apple Samsung and other game-changersBy Marishka Noelle M Cabrera

Breeding a Culture of Innovation

STRATEGY POINTSbull Booz amp Companyrsquos report on The Global Innovation 1000 study suggests that strategic alignment and an innovative culture drive results

bull Innovation is about valuing creativity imagination and the sharing of ideas to deliver great products and services to the market

ldquoInnovate or dierdquo is one catchphrase business leaders seem to hear (or use) more and more of nowadays In a fast-changing world where technology and innovation are becoming the pillars of success for many companies traditional and time-tested methods are taking a backseat After all where would industry leaders like Apple and Google be sans innovation

In Booz amp Companyrsquos annual Global Innovation 1000 study the management and strategy consulting firm surveyed 1000 public companies around the world to determine the impact of innovation strategy and culture on business performance The report ldquoThe Global Innovation 1000 Why

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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Page 40: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

41

The cenSEI Report bull January 16-22 2012

Top RampD Spenders

RampD Spending of the Top 10 Most Innovative Companies

1234567891011121314151617181920

1562144103117131891512819221716

Roche HoldingPfizerNovartisMicrosoftMerckToyotaSamsungNokiaGeneral MotorsJohnson amp JohnsonIntelPanasonicGlaxoSmithKlineVolkswagenIBMSanofi-AventisHondaAstraZenecaCisco SystemsSiemens

$9646$9413$9070$8714$8591$8546$7873$7778$6962$6844$6576$6176$6127$6089$6026$5838$5704$5318$5273$5217

15200214-3353007232-08160-201631070319435-405220613-14

2111391791401873959138511111516114036601455516013251

EuropeNorth AmericaEuropeNorth AmericaNorth AmericaAsiaAsiaEuropeNorth AmericaNorth AmericaNorth AmericaAsiaEuropeEuropeNorth AmericaEuropeAsiaEuropeNorth AmericaEurope

HealthcareHealthcareHealthcareSoftware and InternetHealthcareAutoComputing and ElectronicsComputing and ElectronicsAutoHealthcareComputing and ElectronicsComputing and ElectronicsHealthcareAutoComputing and ElectronicsHealthcareAutoHealthcareComputing and ElectronicsIndustrials

Rank2010 2009 Company

RampD Spending2010 $USMillions

Changefrom 2009

As a of Sales

HeadquartersLocation

Industry

The Innovation Top 20Roche Holding claimed the number one spot among the top 20 spenders for the second year running and for therst time four of the top ve slots were held by pharmaceutical rms

TOP 20 TOTAL $141781 101 112 Avg Avg

Culture is Keyrdquo suggests that more than RampD spending strategic alignment and a culture that supports innovation are what ultimately drives results

The report adds ldquoThere is no statistically significant relationship between financial performance and innovation spendingrdquo Apple for instance ldquoconsistently underspend their peers on RampD investments while outperforming them on a broad range of measures of corporate success such as revenue growth profit growth margins and total shareholder returnrdquo Whereas the top RampD spenders like pharmaceutical companies have ldquomuch less to show forrdquo Tables from the report show the top RampD spenders and the top 10 most innovative companies and their corresponding rank in terms of RampD spending

The 10 Most Innovative CompaniesInnovation executives we surveyed again chose Apple as most innovative Facebook edged onto the list at number 10

12345678910

Company

RampD Spending

2010$US Mil Rank as of Sales

(intensify)

AppleGoogle

3MGE

MicrosoftIBM

SamsungPampG

ToyotaFacebook

$1782$3762$1434$3939$8714$6026$7873$1950$8546

Not Supported

703486324

157

616

na

271285426

14060592539

Not Supported

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Chart from ldquoThe Global Innovation 1000 Why Culture is Keyrdquo

Breeding a culture of innovation

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
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            2. Page 6
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            27. Page 58
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                                1. Page 46 Off
Page 41: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

42

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

But beyond the numbers innovation is ldquoimportant for driving economic progress and competitivenessmdashboth for developed and developing economiesrdquo as shown in the report ldquoThe Global Innovation Index 2011 Accelerating Growth and Developmentrdquo of graduate business school INSEAD The global rankings for the year 2011 reflected the innovation performance of the different countries Switzerland came out on top from fourth place in 2010 followed by Sweden Singapore and Hong Kong The Philippines ranked 91 which trailed behind El Salvador Kenya and Azerbaijan

Culture matters Innovation is more than making great products Innovation is about putting a premium on imagination and creativity in solving problems big or small It is about allowing the individual to push the boundaries of what is to what could be And it is not just about making things work but making them work better

But how does a company actually put innovation to work Quite simply through a culture that supports it

The Booz amp Company report suggests that by bridging the gap between strategic alignment and corporate culture overall growth can be achieved Corporate or organizational culture comprise ldquothe attitudes experiences beliefs and values of the organization acquired through social learning that control the way individuals

and groups in the organization interact with one another and with parties outside itrdquo according to Knowledge Solutions a collection of quick reference guides for staff of the Asian Development Bank Culture is also described here as the ldquopremier competitive advantage of high-performance organizationsrdquo

Leadership expert Heidrick and Struggles emphasizes in its article ldquoBreeding Innovators Inside Your Companyrdquo ldquoInnovation no longer simply means throwing money at RampD It means outperforming the competition through the power of ideas in any aspect of the enterpriserdquo

One of the biggest conglomerates in the country Jollibee Foods Corporation has been consistently outperforming competitors because of its strategy to capture the distinctly Filipino taste through new product offerings every now and then (like the Jollibee Hash Brown Burger) In Asia 200 an interactive graphic by The Wall Street Journal even ranked Jollibee as the top Philippine company in terms of innovation from 1997 to 2010

Being innovative is not and should not always be about profit It can instead be used to make life better for others In the case of social enterprise company Rags2Riches co-founder Reese Fernandez recipient of the Rolex Awards for Enterprise Young Laureates Programme established the business with the intention of helping women in urban poor communities by arranging for them to sell their products directly to retailers Not only that they trained these artisans

The creative spark in corporate Philippines

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
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            5. Page 12
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            27. Page 58
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                1. Page 4 Off
                2. Page 6
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                    2. Page 7
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                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 42: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

43

The cenSEI Report bull January 16-22 2012

Corporate cultures need to be clearly identified and communicated to members of the organization As Harvard Business School Professors James Heskett and Earl Sasser in ldquo10 Reasons to Design a Better Corporate Culturerdquo posit ldquoOrganizations with clearly codified and enforced cultures enjoy great employee and customer loyalty

in large part because they are effective in either altering ineffective behaviors or disengaging from values-challenged employees in a timely mannerrdquo

Game-changers In business media group Fast Companyrsquos ldquo50 Most Innovative Companies 2011rdquo Apple tops the list

from number three in 2010 followed by Twitter Facebook and Nissan Groupon and Google came in at number five and six respectively while Amazon was at number 27 a huge drop from the number two spot and Microsoft was at 37th place from 48th the previous year Personal apparel brands Nike and Marks and

Spencer and luxury brand Burberry were also on the list

Todayrsquos business landscape Fast Company says is ldquolittered with heritage companies whose CEOs battle their industrys broken model with inertia layoffs lawsuitsrdquo and that few would maintain dominance in say

Breeding a culture of innovation

to create fashionable handbags out of scrap material used to make rugs These bags can now be found in top-end stores

In an interview with Fernandez conducted for Futurechallengesorg by Monouchehr Shamsrizi the company has positioned itself at the forefront of what has been labeled as ldquoeco-fashionrdquo The leveraging of the social aspect of the enterprise through the involvement of the underprivileged women artisans has helped the company generate some cachet among socially ecologically and fashionably conscious Filipinos

Innovation as a business concept is starting to blossom among Filipino enterprises Results of the 2009 Survey of Innovation Activities discussed in a Philippine Institute for Development Studies paper show that 54 of sampled firms were classified as ldquoinnovation activerdquo with larger firms innovating

more than smaller ones This means that the firms are product or process innovators engaged in innovation projects or engaged in expenditure

for innovation activities In addition those surveyed deem ldquocost factors to be the most important barrier to innovationrdquo The sample included food manufacturing electronics manufacturing and information technology enterprises from Quezon City Metro-Cebu Davao City and the Philippine Economic Zone Authority (PEZA) areas in Cavite and Laguna

While Filipinos are known to be ingenious and resourceful not many local companies are strongly identified as putting groundbreaking innovation

at the center of their core strategy and corporate culture yet Then again times may be changing as Filipinos are not known to be left behind by their Western counterparts especially when it comes to global trends

Cost is the most

importantbarrier to

innovation

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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        2. Page 31
        3. Page 53
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                                1. Page 46 Off
Page 43: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

44

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2025 Instead ldquo[t]hat world will be ruled by the kinds of companies on this listrdquo

Bloomberg Businessweek likewise has a list of its own 50 Most Innovative Companies based on data from longtime partner the Boston Consulting Group (BCG) The report found that compared to 2009 where the list was predominantly made up of companies from the United States the upturn in the global economy enabled new players to emerge in 2010 Asian companies such as Toyota and Sony from Japan Samsung and LG Electronics from South Korea and Indiarsquos Tata Group secured their place in the top 25

Taking off from author Ted C Fishmanrsquos argument in his book China Inc stating that China possessed a ldquofactory culturerdquo and could ldquoimitate but not innovaterdquo Bloomberg Businessweek warns current industry giants in a related article ldquoIf Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West however the one-two punch of high-value research and

development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacyrdquo

Over time companies have been dubbed as synonymous with innovation

because they changed the gamemdashthey not only upped the ante for industry

players because of the products and services they created they set

their own unique standard for doing business

3M for instance was founded as the Minnesota Mining and

Manufacturing Co back in 1902 but it still invents products

used in transportation electronics healthcare manufacturing and in the home or office as if it were a start-up To date it has developed over 55000 products and 30-plus core technologies The book ldquoA Century of Innovation The 3M Storyrdquo chronicles the journey of the science-based company that thrived on innovation in order to survive Indeed one lesson to be gleaned from the 3M story is that out-of-the-box-thinking will lead to as much failures as there are successesmdashbut it will be all worth it

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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        2. Page 31
        3. Page 53
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                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 44: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

45

The cenSEI Report bull January 16-22 2012

Google for its part encourages innovation through out-of-the-box thinking tolerance for failure sharing ideas and ldquoblue-sky thinkingrdquo or allowing engineers a full day each week to work on anything they want Google employee Susan Wojcicki in her article in Google online magazine Think Quarterly entitled ldquoThe Eight Pillars of Innovationrdquo shares these principles of innovation that the company has picked up along the way

Fostering a culture of innovation Cultivating a culture of innovation in an organization requires more than anything transformational leadership in order to inspire its members to champion the cause

The Harvard Business Review blog entry ldquoSix Secrets to Creating a Culture of Innovationrdquo encourages leaders to make transformational moves such as meet peoplersquos needs in the workplace because ldquothe more people are preoccupied by unmet needs the less energy and engagement they bring to their workrdquo teach creativity

systematically because believe it or not it can be developed nurture passion make the work matter and show members of the team that they are doing something beyond themselves provide the time for creative thinking and do it on a regular basis and lastly value renewal The piece ends with ldquoThese activities are only possible in a workplace that doesnt overvalue face time

and undervalue the power of renewalrdquo

Meanwhile Inccom in the article ldquo7 Steps to a Culture of Innovationrdquo recommends fueling passion and focusing that into a sense of purpose celebrating ideas and rewarding creativity fostering autonomy and extending trust so as not to stifle the creative process encouraging employees to take risks

without fear of judgment learning to let go of the fear of failure and keep on trying thinking small since smaller companies ldquotend to be more curious and nimblerdquo than large corporations and maximizing diversity in the workforce whether it be due to race religion political beliefs hobbies and interests

Breeding a culture of innovation

Transformationalleadership is the sparkplugto spur bold

out-of-the-boxthinking andrisk-taking

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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                            1. Page 46 Off
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                                1. Page 46 Off
Page 45: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

46

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

NEWS ON THE NET Business

US lsquoinsourcingrsquo trend a cause for Philippine concern The outsourcing sector of the Philippines should focus on developing and marketing higher-value services if it hopes to keep a competitive edge in light of the move by the US to ldquoinsourcerdquo more jobs The trend could potentially signal a long-term slump in the demand for outsourcing services locally Late last year the Call Center Worker and Consumer Protection Act which seeks to ban American companies from setting up call centers abroad was filed in the US Congress In reaction to this President Aquino said he is optimistic the measure will not be passed by the US government

PLDT poised to corner up to 88 of Digitel stock after capital increase Governmentrsquos approval of Digitelrsquos bid to nearly triple its capital stock paves the way for the Philippine Long Distance Telephone

Company (PLDT) to take an even larger stake in Digitel BusinessWorld reports that PLDT which currently controls 5126 of Digitel shares can increase its stake if it converts the zero-coupon convertible bonds acquired as part of the P692 billion takeover deal late last year According to a report by the Philippine Senate Committeee on Public Services last years merger of PLDTs Smart Communications and Sun Cellular (Digitel) gave PLDT a combined 70 control of the cellular communications market

Labor info systems to be available online This 2012 the Department of Labor and Employment (DOLE) plans to make available online six new information systems case docket and monitoring enhanced labor standards enforcement monitoring foreign labor operations human resource information registry of establishments information and a virtual integrated system Labor Secretary Rosalinda Baldoz said in a statement that one of DOLErsquos thrusts this year is ldquoto develop new information systemshellip to ensure fast extensive and integrated delivery and monitoring of all services being provided by all DOLE-

attached agencies bureaus and servicesrdquo In conjunction to this several connected agencies such as the Professional Regulation Commission and the Philippine Overseas Employment Administration are also upgrading their online capabilities

Bioethanol production canrsquot cope with demand The Philippines has to import more bioethanol this year about 400 million liters because of local producersrsquo inability to supply more says the Department of Energy The government agency said that expected demand for the alternative fuel could reach up to 500 million liters of which only 100 million liters can be produced locally Energy Secretary Rene Almendras also cited the full effectivity this year of the Biofuels Act of 2006 which requires that all gasoline sold in the country should have at least 10 percent bioethanol in the mix

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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        2. Page 31
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                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 46: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

47

WORLD

By Marishka Noelle M Cabrera

A Glimmer of Hope for MyanmarThe world wants to be cautiously optimistic about the governments reform-minded moves

A year after Myanmars military-backed regime held elections following decades of harsh repression the world is waiting to see if recent developments reflect genuine political and economic reform in this reclusive nation

After all a string of modest yet significant initiatives from President Thein Sein ndash ie freeing democracy icon and National League for Democracy (NLD) leader Aung San Suu Kyi from years of house arrest and conducting subsequent dialogues with her easing of Internet and media restrictions suspending a multi-billion

STRATEGY POINTSbull ASEAN and the West are taking notice of developments in Myanmar

bull President Thein Sein is seen as the careful reformist

bull Improvement of the lives of ordinary citizens will be the true test of reform

The cenSEI Report bull January 15-22 2012

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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        2. Page 31
        3. Page 53
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                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 47: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

48

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

dollar hydropower project with China and releasing hundreds of prisoners under a broad amnesty ndash would have been utterly unthinkable a year ago

The world is taking notice of these positive developments Welcoming the once-pariah state into the fold of international affairs leaders of the Association of Southeast Asian Nations (ASEAN) have agreed at the blocrsquos summit last November to allow Myanmar to chair ASEAN in 2014 a ldquovictory for the new government seeking international legitimacyrdquo an Agence France Presse report published on the Ethnic Nationalities Council website says

ldquoAll leaders are in agreement that significant changes significant developments have taken place in Myanmar and those changes have made it more conducive for Myanmar to carry out this responsibilityrdquo Indonesian foreign minister Marty Natalegawa explains He adds that ASEAN will continue to monitor developments to ensure that Myanmar will be ldquomore than where they are nowrdquo come 2014 amid concerns that the move may be premature The ASEAN chairmanship has been denied Myanmar over criticism ofits historic hardline policies and human-rights abuses

The NLD returns to the political system In November Suu Kyi expressed her intention to run in the upcoming by-election with the NLD unanimously deciding to re-register as a political party Before 2011 came to a close Suu Kyi officially registered her party Photos from a video from Reuters show Suu Kyi meeting with Myanmar officials in the remote capital Naypyitaw and then arriving at the election commission office to register

the NLD The Associated Press reports no date has been set for the by-election but Election Commissioner Tin Aye says the announcement will be made three months before the elections to give candidates time to campaign

The NLD boycotted the 2010 electionsmdashand the entire political system for that matter ever since the partyrsquos victory in the 1990 general elections was not recognized by the junta

The international community has been looking to Suu Kyi for guidance as to how to regard the new governments actions So far Suu Kyi has been cautious in welcoming the developments while admitting that talks with government officials ldquofelt realrdquo A report from Singapores The Straits Times as published in Asia News Network quotes Suu Kyi I know we are not there yet but we can see the way clear ahead more than we have ever been able to

Nevertheless that there have been changes ndash no matter how small or cosmetic ndash cannot be denied In light of these apparent changes United States Secretary of State Hillary Clinton met with both President Thein Sein and Suu Kyi in the backward yet resource-rich country on Dec 1 The Economist in its piece ldquoA new Great Gamerdquo calls the visit ldquoan endorsement of a reform process that started slowly over a year ago but which has been gathering momentum fast since August when Ms Suu Kyi herself travelled to Naypyidaw to meet Mr Thein Sein for the first timerdquo Sanctions not being lifted just yet Although the lifting of sanctions that have long crippled economic development in the country remains to be seen Clinton

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
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            2. Page 6
            3. Page 8
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            21. Page 44
            22. Page 48
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            27. Page 58
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                1. Page 4 Off
                2. Page 6
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                27. Page 58
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                    2. Page 7
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                              1. Button 20
                                1. Page 46 Off
Page 48: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Breeding a culture of innovation 49

The cenSEI Report bull January 16-22 2012

announced the US will finally ldquoagree to and supportrdquo assessment programs by the International Monetary Fund and World Bank based on reports from the Democratic Voice of Burma

Also included in the report is a video of a press conference in which Clinton says ldquoAny steps that the government takes will be carefully considered and will be as I said matched because we want to see political and economic reform take hold And I told the leadership that we will certainly consider the easing and elimination of sanctions as we go forward in thisprocess togetherrdquo

Upon meeting Suu Kyi Clinton tells the BBC It was incredibly emotional and gratifying to see her free from the many years of house arrest In welcoming current reforms in the country Clinton adds There has to be a momentum behind reform and were waiting and watching for thatrdquo

Countering the growing influence of ChinaIn an AP analysis published in The Guardian prior to the visit the Obama administrationrsquos diplomatic efforts are said to be geared toward expanding US ties in ldquoeconomically vibrant Southeast Asia as a counter to the growing influence of Chinardquo

Despite Chinarsquos support the AP analysis says Myanmarrsquos nationalistic leaders ldquohave an ingrained suspicion of China and

are wary of becoming in thrall to another powerrdquo Thus the reclusive government has tried to balance Chinarsquos influence by building ties with its western neighbor India which has according to a paper by the Indian Council of World Affairs until recently been ldquoambivalent in dealing with Myanmarrdquo due to concerns about international opinion Now India

ldquohas a stakerdquo in having friendly relations with Myanmar for economic and security reasons

Since Myanmarrsquos isolation from the world China has supported Myanmar for geopolitical reasons but an academic writing in 2002 says that Myanmarrsquos China policies since 1948 have been ldquoa combination of its internal needs and responses to external threatsrdquo

In ldquoThe Political Economy of China-Myanmar Relations Strategic and Economic Dimensionsrdquo published in the Ritsumeikan Annual Review of International Studies Poon Kim Shee visiting professor of international relations at Kyoto Japan-based Ritsumeikan University maintains that Myanmar ldquois neither a strategic pawn nor an economic pivot of Chinardquo and that Sino-Myanmar relations in the past have been mutually beneficial

Leadership at the crossroads With Thein Seinrsquos leadership at the crossroads the new leader is faced with the challenge of strengthening the credibility (and acceptability) of his government Despite his strong association with the former

I know we are not there

yet butwe can see the way clear ahead more than

we have ever been able toAung San Suu Kyi

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        2. Page 31
        3. Page 53
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                              1. Button 20
                                1. Page 46 Off
Page 49: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

50

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

junta leader General Than Shwe Thein Sein is attempting to project an image of independence An analysis from Aljazeera calls the Myanmar president ldquothe careful reformistrdquo because while he may be sincere there are still those around him ldquoeager to keep the status quordquo

In September the president suspended work on the $36-billion Myitsone dam project amid growing public opposition The Irrawaddy an online news service by exiled Burmese journalists living in Thailand reports that the president wrote a letter to Parliament saying ldquoOur government being elected by the people has to take great consideration of public opinion Accordingly we have an obligation to respond to the public concern with seriousness Therefore we will suspend the Myitsone project during the term of our governmentrdquo As such the proclamation was received ldquoby opponents of the dam as a welcome developmentrdquo

According to International Rivers an environmental organization supporting Myanmarrsquos local groups concerns over the Myitsone project involve its role in ldquoexacerbating the long-standing conflict between the ethnic Kachin people and the military governmentrdquo not to mention the damrsquos reservoir ldquowill submerge important historical and cultural sitesrdquo and will cause

ldquoirreversible damage to Burmarsquos key river systemrdquo

The Myitsone dam is said to be one of the seven damsmdashthe cornerstone in factmdashof a grand hydropower project by China Power Investment based on reports from The Washington Post Through the years China has managed to seal the deal with ldquooften-repressive regimesrdquo in its quest to find more sources for the countryrsquos increasing energy needs Fortunately for China economic and political sanctions from the West have pushed Myanmar to forge closer relations with China

Slowly liberalizing previous hardline policies Even as some critics might maintain that Thein Sein is merely a pawn used by the junta to perpetuate power with the change in leadership Myanmar is seen as slowly liberalizing its previous hardline policies In defying China the nominally civilian government is sending a signal that it is not beholden to China and more importantly that the peoplersquos voice is actually being heard a far cry from the countryrsquos state of affairs under Than Shwe just over a year ago In another surprising move the government released some 200 prisoners in October including key figures in the NLD and comedian-activist Zarganar according

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    3. Page 53
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        2. Page 31
        3. Page 53
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            27. Page 58
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                                1. Page 46 Off
Page 50: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Breeding a culture of innovation 51

The cenSEI Report bull January 16-22 2012

to reports from The Telegraph Some in the international community welcomed the move as an encouraging step while others were disappointed that selected prisoners were not among those released

But now in ushering the new year the government was reported to have begun releasing more political prisoners including Shin Gambira a Buddhist monk who led the 2007 uprising Sai Nyunt Lwin a well-known ethnic Shan politician and Min Ko Naing a leader of the 88 Generation Students Group who led the pro-democracy protest in 1988 A Reuters report published by GMA News reveals the amnesty could effectively cover 651 inmates according to officials

Thein Sein ldquoneeds to be given some room to moverdquo a commentary from Radio Free Asia says Further the analysis describes Thein Sein as being ldquooverly cautiousrdquo because he is aware that ldquothe hardliners are still waiting in the wings for their chance to contain himrdquo As the commentary puts it ldquoIt is clear from talking with government officials and sources close to the new Burmese army that the old junta has gonendashwhether for good or not only time will tellrdquo

Meaningful and irreversible reforms still needed Still some observers are not convinced The Irrawaddy in its editorial ldquoOne Year Later Bogus Election Offers

Some Hoperdquo believes that while present reforms are welcomed and appreciated more ldquomeaningful and irreversible reforms that put real political and economic power into the hands of the Burmese peoplerdquo are still needed

Sadly deep ethnic conflict still plagues the country The paper ldquoBurmarsquos Continuing Human Rights Challengesrdquo of the Human Rights Watch concludes much has yet to be done in terms of resolving ethnic conflict and ending the culture of impunity pervading the military ldquoIn ethnic areas the human rights situation remains dire While there are grounds for hope that fundamental change will come to Burma it is too early to conclude that it has in fact begunrdquo the paper notes

The Transnational Institute provides a backgrounder on the tensions among ethnic groups and the government and says the new administration has the opportunity to resolve Myanmarrsquos ldquolong-standing political and ethnic crisesrdquo through dialogue and participation ldquoSincere inclusive and considered policies could mean that the new government will be the first to achieve ethnic peace in Burma since independencerdquo the paper opines

Moreover the international community is still calling on the Yangon government to free more political prisoners Speaking out in

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
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        2. Page 31
        3. Page 53
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                        22. Page 49
                        23. Page 51
                        24. Page 55
                        25. Page 57
                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 51: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Breeding a culture of innovation52

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

2010 UN Special Rapporteur on human rights in Myanmar Tomaacutes Ojea Quintana is urging the government to release all remaining political prisoners by the yearrsquos end He says the government must not use prominent prisoners as ldquohostages to have the compliance of the international communityrdquo

In an interview with Reuters Thein Seins chief political adviser Ko Ko Hlaing said that the government is also careful about instituting reforms fearing pro-democracy uprisings similar to those during the Arab Spring may also happen in the country if it moves too quickly

A question persists Is there enough reason to hope that these changes in Myanmar are in fact overtures to national reconciliation The ultimate challenge is rebuilding a nation torn by decades of repression by a monolithic and rigid system ldquoNational reconciliation is the foundation upon which we want to build our new nationrdquo Suu Kyi says in an interview with The Economist

Major reform underway The International Crisis Grouprsquos policy briefing ldquoMyanmar Major Reform Underwayrdquo provides an analysis of developments in terms of economic political human rights and legislative reforms The paper

maintains nonetheless that political reconciliation ethnic conflict international relations with others in the region the West and the United Nations are divisions that should be addressed

Renewed engagement with the world ndash particularly ASEAN and the West ndash notwithstanding the true test of reform will be in the improvement of the lives of ordinary Burmese citizens In a country rich in timber minerals (including natural gas and oil) and marine resources the general populace still suffers from slow economic development after years of isolation

(A December 2010 Asian Development Bank factsheet on Myanmar reveals that the bank has not provided direct assistance to Myanmar in more than 20 years The bank does say nonetheless that it liaises with the countrys major bilateral donors regarding their assistance programs continues to monitor political and economic developments and will formulate an operational strategy when appropriate )

These days hope is the only way to move forward in Myanmar and now that the tide appears to be turning the world is hoping the government wont try to turn it back

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
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            27. Page 58
              1. Button 26
                1. Page 4 Off
                2. Page 6
                3. Page 8
                4. Page 10
                5. Page 12
                6. Page 14
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                25. Page 54
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                27. Page 58
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                    1. Page 5 Off
                    2. Page 7
                    3. Page 9
                    4. Page 11
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                        1. Page 5 Off
                        2. Page 7
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                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 52: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

53

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET World

Iran starts uranium enrichment condemns American to death

Iran defies US sanctions and boldly begins to enrich uranium deep inside a mountain at the Fordow bunker near the city of Qom The Middle Eastern country has also brought down the death sentence for Amir Mirza Hekmati a 28-year old former US military translator and dual citizen originally from Arizona The two incidents made news just when US sanctions have started to affect Iran economically Iranian President Mahmoud Ahmadinejad has been very vocal about the sanctions and continues to question why the US insists on ldquopunishingrdquo Iran North Korea announces prisoner amnestyNorth Korea has announced that in celebration of the late Kim Jong-il and Kim Il-sungrsquos birthdays the country will grant amnesty for prisoners beginning February 1 Though there has been no mention of the number of prisoners to be released Amnesty International estimates that there are as many as 200000 being held in political prison camps all over North Korea

BBC News provides a profile of Kim Jong-un who took over the leadership of North Korea when his 69-year-old father Kim Jong-il passed away last month

Picasso painting stolen from Athens exhibit The Athens National Gallery recently reported the theft of a Picasso painting the Womanrsquos Head (given to the gallery by the artist himself) along with Mondrianrsquos ldquoLandscape with a millrdquo and a Caccia pen-and-ink drawing called ldquoil Moncalvordquo valued at about 5 million euros combined Police said that the heist took only seven minutes with the thieves stripping all three artworks from their frames after

breaking into the back of the gallery by forcing open a balcony door The theft and smuggling of art and antiquities has long been a problem in preserving national heritage especially for Greece The Greece-US bilateral agreement to protect antiquities enacted in July and the 15th of its nature signed by the US helps ndash although more of these agreements should be proposed and signed all over the world to make heists such as these a thing of the past

Two more monks set themselves alight in China Acts of self-immolation are rising in China with two more monks reportedly setting themselves on fire in separate incidents These are the 13th and 14th incidents of self-immolation since March of last year both claimed by Tibetan campaign groups as statements of protest against Chinese rule Tibet has been a source of unrest for the Chinese government since the 1959 Tibetan Uprising with intermittent incidents flaring up such as the Tibetan Uprising of March 2008 BBC News dedicates a section of its website to the historical background and the current movement of tensions between Tibet and China

Picassos Cabeza de Mujer stolen from the National Gallery in Greece

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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    3. Page 53
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Page 53: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

54

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

By Maria Carmina Olivar

Cloud computing Up there and all around usWith applications such as e-mail virtual storage and business services cloud computing looms larger over our computing horizon

STRATEGY POINTSCloud computing is all around us in online applications that have become commonplace

If youre a small business you can avail of cloud-based services to run and develop your enterprise

Cloud computing is one of those things that todays computer user avails of on a daily basis and most likely without thinking twice about it

The most popular example is e-mail Do you use Hotmail Yahoo Gmail or any other web-based e-mail service If you do youre using an online service whose major benefit to you may seem obvious but worth reiterating nonetheless you dont have to be in a fixed location ndash ie your home or your office ndash to access your mail Wheres your mail being stored Does it really matter

TECHNOLOGY

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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                                1. Page 46 Off
Page 54: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Cloud computing Up there and all around us 55

The cenSEI Report bull January 16-22 2012

(If youre used to web-based e-mail youve probably discovered that storing important files and notes in draft letters without addressees has even freed you from the need to store them in flash drives except of course if you need a physical copy If youre only discovering that now youre welcome)

Moreover when you upload or download a document video or a photo through an online portal or when you use online storage to back up important files using Google Docs or Dropbox or the new iCloud to store your photos documents and personal music collection so they can be accessed by your desktop computer your notebook your tablet and your music player youre promoting the proliferation of online storage and applications in everyday life Youre contributing to what could be a major paradigm shift ndash from personal desktop-based computing to virtual cloud-based computing

In fact if you have a small venture thats not Internet-based but for which youd like to establish an online presence almost everything you need in order to be present on the Internet is based on applications made possible through cloud computing If you sign up for an e-mail address on Yahoo or Gmail upload video advertisements or teasers on Vimeo or YouTube post pictures and manage an online store on Multiply set up a payment system using PayPal andor create a page to raise awareness of your product or services on Facebook youre already using cloud computing technology

To be sure virtual computing has been with us since the Internets takeoff as a commercial medium in the 90s but primarily through file transfers from one personal computer to another Whats

gaining traction these days is the promotion of cloud-based computing not just for file transfers and online payments but also for customized business applications AMIrsquos World Wide Cloud Services Study estimates that small and mid-size business (SMB) spending on cloud computing will approach a hundred billion dollars by 2014

What is cloud computing According to a white paper published by Sun Microsystems in June 2009 cloud computing is the next generation of network computing Quite simply cloud computing works by increasing the speeds through which applications are deployed by end-users using information technology as a service over the network The National Institute of Standards and Technology of the US defines it as ldquoa model for enabling convenient on-demand network access to a shared pool of configurable computing resources (eg networks servers storage applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interactionrdquo

In laymanrsquos terms cloud computing can give end-users a network applications and data storage and access that dont require them to have anything more than a personal computer of their own The end-users dont have to know where the applications and data are stored nor do they have to be network troubleshooters or database programmers

There is no exact precise definition of cloud computing yet as there are different models being employed currently A European Commission paper on ldquoThe Future of Cloud Computingrdquo draws a distinction between private and public clouds ldquoPrivate cloudsrdquo

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
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                    1. Page 5 Off
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Page 55: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

56

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

As reported by Andy Patrizio in internetnewscom in March 2009 author and former Harvard Business Review executive editor Nicolas Carr likens the development of cloud computing to the early 20th-century developments that made electricity the public utility ndash and ubiquitous necessity ndash it is today According to Carr cloud computing is like an electrical grid and todays advances in cloud computing are analogous to the developments that facilitated the use of electricity in the early 20th century

In the 19th century electric generators served very specific territories Companies would build power plants specifically for their own usage It was not a shared utility This is similar to computing power before the cloud computing technology revolutionized the industry ndash back in the day a powerful computer handling many tasks and responsible for holding and processing huge amounts of information would need its own specific storage space server hardware and even software

Direct Current (DC) power (pioneered by Thomas Edison) allowed for power plants to exist as separate entities that generated power for companies who then paid for the service The only drawback was that DC power could be transmitted only over short distances Then Nikola Teslas Alternating Current (AC) made long-distance power

transmission possible So today were all plugged in and comfortable and taking electricity for granted

Cloud computing technology Carr posits will make it possible for computing machines to have that same convenience of being plugged in and comfortable It has changed the way we live by changing how we interact with and use computers and other online gadgets and by changing how much we expect to be able to do

Whereas before computing power was a tedious and expensive thing to build up for your own use today you can store a massive amount of information or run a complicated processing program elsewhere in a cloud but retain control of it using your laptop iPad netbook or even your smartphone It is becoming cheaper and more accessible ndash much like electricity after the development of DC and then AC power That is the essence of Carrs electrical grid comparison ndash that cloud computing technology much like the electrical grid will be the foundation for a whole new range of services and possibilities that will open up and permanently change any industry that utilizes it

such as eBayrsquos are usually owned or leased by a private entity and their functionalities and inner workings arenrsquot made obvious to the customer Meanwhile ldquopublic cloudsrdquo such as Amazonrsquos allow end-users to take

advantage of cloud features for their own purposes Doing this allows other entities to outsource cloud services to providers which reduces costs and eliminates the need to build their own infrastructure ldquoHybrid

cloudsrdquo are a mix of both and are still being developed Private and public cloud features are intertwined to reduce cost while maintaining data security Other types of clouds that may be more prevalent in the

future include ldquocommunity cloudsrdquo and ldquospecial purpose cloudsrdquo

Cloud computing for personal and professional use To illustrate cloud

The plug-anywhere cybergrid in the ether

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
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    2. Page 31
    3. Page 53
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        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
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            27. Page 58
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                2. Page 6
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                27. Page 58
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                    1. Page 5 Off
                    2. Page 7
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                    25. Page 57
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                        1. Page 5 Off
                        2. Page 7
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                        24. Page 55
                        25. Page 57
                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 56: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Cloud computing Up there and all around us 57

The cenSEI Report bull January 16-22 2012

The bottom line is

that cloud computing is

fast becoming a dominant

player in how we live and

operate in the Internet age

computing on a personal level imagine youre an end-user who wants to upgrade your Macbooks operating system to the latest Mac OS X Lion which is being sold by Apple only through its online App Store through direct download Instead of going to an Apple Center or another retailer to buy a physical installation DVD you can download the installer of Lion upon payment through credit card The content or app that you need is available to you online anytime and anywhere Anything that is stored anywhere other than your computers local hard drive is labeled as being in the cloud

This is true whenever you are looking for a device driver to run specific hardware or peripherals of your PC laptop digital camera or smartphone You just go to their specific website check out the technical support section and you will find the file you need in their cloud You download install and in a moment your device is running with the latest build

To illustrate cloud computing on a professional level Imagine you are in the publishingindustry and your latest magazine issue is ready for printing Say for example that your printer is in Hong Kong or Singapore while your office in Manila You can send over the electronic copy of your magazine for printing not in a DVD that you still have to send via courier service but through FTP or File Transfer Protocol An FTP facilitates an online repository that can be set up by an individual or company which is usually secure and accessible through a username and password and which allows

for the uploading downloading and storage of large items such as media files Imagine the convenience of exchanging large files ldquoin the cloudrdquo to facilitate your pre-press and proofing tasks

What is a cloud platform According to a paper published by David Chappell amp Associates entitled ldquoA Short Introduction to Cloud Platformsrdquo a cloud platform

allows developers to write applications that will be able to run in a cloud or use cloud services or both Other terms for a cloud platform include on-demand platform and platform as a service (PaaS)

Cloud infrastructure services that provide a foundation by which applications on a cloud platform are made include the following storage integration and identity In a nutshell applications need space for data and currently are also designed to ldquotalkrdquo or

connect to other applications for the usersrsquo convenience Lastly applications typically need to know something about its users ndash an identity service on the cloud makes it easier for digital identities to be verified and utilized An example of this isMicrosoftrsquos Windows Live ID

An example that online businesses regularly benefit from is the feature that allows end-users to login to their sites via Facebook Connect Businesses that are just starting out donrsquot have to waste time and money hiring people just to program a way by which they can control and keep tabs on who is accessing their website Facebook Connect does it for them The tool allows users who

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
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            27. Page 58
              1. Button 26
                1. Page 4 Off
                2. Page 6
                3. Page 8
                4. Page 10
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                  1. Button 23
                    1. Page 5 Off
                    2. Page 7
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                      1. Button 24
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                        2. Page 7
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                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 57: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

Cloud computing Up there and all around us58

CONTENTS NATION BUSINESS WORLD TECHNOLOGY

may be too lazy or busy to set up a new account practically instant non-anonymous secure access to different websites otherwise not connected to Facebook and thus helps Internet-based businesses grow overall

What kinds of applications are being developed on cloud platforms A paper entitled ldquoAbove the Clouds A Berkeley

View of Cloud Computingrdquo published by the US Berkeley Reliable

Adaptive Distributed Systems Laboratory enumerates the

different kinds mobile interactive applications

parallel batch processing analytics and more The most visible of these of course are the mobile interactive applications If you own a smart phone chances are you are using one of these The rest have more to do with the computing nature of cloud

services ndash since storage and computation are more efficient with cloud technology computing times are sped up significantly and thus make for more compact and very useful applications than their previous counterparts

What does this all mean The bottom line is that cloud computing is fast becoming a dominant player in how we live and operate in the Internet age There is a paradigm shift in the works Although cloud service outages remain an issue the fact of the matter is that computer power nowadays has been made so cheap by cloud computing technology that it outweighs the chance of failure While industry leaders like Amazon Google and Microsoft have all experienced downtime and caused standstills for both large companies and end-users cloud computing nevertheless remains a formidable technology that looks like its here to stay

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

  1. Button 21
    1. Page 3 Off
    2. Page 31
    3. Page 53
      1. Button 22
        1. Page 3 Off
        2. Page 31
        3. Page 53
          1. Button 25
            1. Page 4 Off
            2. Page 6
            3. Page 8
            4. Page 10
            5. Page 12
            6. Page 14
            7. Page 16
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            20. Page 42
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            27. Page 58
              1. Button 26
                1. Page 4 Off
                2. Page 6
                3. Page 8
                4. Page 10
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                  1. Button 23
                    1. Page 5 Off
                    2. Page 7
                    3. Page 9
                    4. Page 11
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                    15. Page 35
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                      1. Button 24
                        1. Page 5 Off
                        2. Page 7
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                        24. Page 55
                        25. Page 57
                          1. Button 19
                            1. Page 46 Off
                              1. Button 20
                                1. Page 46 Off
Page 58: The CenSEI Report (Vol. 2, No. 02, January 16-22, 2012)

59

The cenSEI Report bull January 16-22 2012

NEWS ON THE NET Technology

Kodak restructures amid bankruptcy battleUS photography giant Eastman Kodak Co is keeping bankruptcy at bay by reducing its business segments Investors initially spooked by reports of Kodakrsquos bankruptcy cheered the news of the companyrsquos restructuring The Wall Street Journal first broke the news of an impending bankruptcy filing of what once was considered Americarsquos biggest tech icons A slideshow on the brief history of Kodak is provided by mashablecom The troubles besetting Kodak is attributed to its failure to fully capitalize on technologymdashthe digital camera-- which it invented and pioneered

Social media contributes to ethical lapses in the workplace

New research is uncovering a disturbing trend in the workplace showing that our social media-inundated culture is contributing to a significant slack in ethical

work behavior The 2011 National Business Ethics Survey of the Ethics Resource Center confirms that over the last two years almost half of all US employees committed a legal or ethical violation while at the workplace ndash and that social media usage seems to be part of the problem in no small part due to the ease by which peer pressure to conform and compromise and retaliation against whistleblowers can be done via the social media platform

$1000 one-day DNA mapping now a realityTwo rival US companies have separately built machines which are able to sequence a genome in one day The machines are hailed as an exceptional advance that can change the field of medicine allowing people to easily ldquoelucidate a diseasersquos underlying genetic causes as well as possible ways to treat itrdquo

The Human Genome Program of the US government defines DNA

sequencing as ldquothe process of determining the exact order of the 3 billion chemical building blocks that make up the DNA of the 24 different human chromosomesrdquo A video by Life Technologies shows the implications of the medical and technological breakthrough

Nicotine may help combat memory loss A recent study cited by Bloomberg surveys 781 former smokers and reveals that almost a third relapsed and went back to smoking tobacco even after using nicotine replacement products The results cast doubts on the effectiveness of products such as gums and patches which claim to help smokers stay off the habit

Relatedly smoking may not entirely be bad to onersquos health according to a new study cited by Livesciencecom which says that nicotine may help combat memory loss Even smoking marijuana is not harmful asserts a study by the Journal of the American Medical Association which finds that a joint a week for up to 49 years does not result in a significant decline in lung function

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