The Philippines suffered $13 billion of damage when Su-pertyphoon Yolanda (inter-

national code name haiyan) tore through the country in 2013, a year after another storm killed 1,067. Now, the nation is looking at defray-ing the costs of future calamities with catastrophe bonds. The government is in talks with the World Bank on a possible for-eign-currency offer of the notes, National Treasurer Roberto B. Tan said in a mobile-phone text mes-sage on Monday, an idea floated by Finance Secretary Cesar V. Purisima in 2013. Issuers of the debt, usually sold by insurers, pay higher yields but in the event of a major natural disaster, interest payments are fore-gone, or the principal is reduced. “Among the greatest threats to the Philippine growth story is our heightened exposure to disaster risk,” Tan said in a March 14 in-terview near Cebu City. The World Bank might issue the notes on the country’s behalf, he said this week. A catastrophe bond sale would help meet rebuilding costs after ma-jor calamities, like Yolanda, which killed more than 6,000 people and washed away parts of the city of Ta-cloban in November 2013. Aside from being lashed by frequent typhoons, the country’s location on the Pacific Ring of Fire means that it is prone to earthquakes and volcanic eruptions. The Philippines suffered losses of $24.5 billion, or 3.8 percent of gross domestic product (GDP), due to weather-related events in 2013, according to Germanwatch. The en-vironmental group says the country

By Lenie Lectura 

The energy Reg-ulatory Com-mission (eRC)

has issued a certificate of compliance (COC), essentially a mark of a project’s favored status, to AC energy holdings Inc.’s wind-power projects in Ilocos Norte. AC energy is the power-generating arm of Ayala Corp. A company statement released on Friday said its wind farms in that province have received their feed- in tariff, or FiT COC, which enti-tled its 19-megawatt (MW) wind-farm expansion in Bangui town, under Northwind Power Develop-ment Corp. (Northwind), and its 81-MW facility in Caparispisan, Pagudpud town, under North Luzon Renewable energy Corp. (North Luzon Renewables), to a FiT rate of P8.53 per kilowatt-hour for a period of 20 years. The FiT rate covers the period October 10, 2014, to October 9, 2034, for the 19-MW Northwind plant, and from November 11, 2014, to November 10, 2034, for the 81-MW North Luzon Renew-ables facility. Prior to the issuance of the COC, the Department of en-ergy issued a Certificate of endorse-ment for FiT for both projects, after these were commissioned and began operating commercially. Northwind’s 19-MW expan-sion was completed in October 2014 and has since been delivering power to the grid. The expansion puts Northwind’s total capacity to 52 MW.  North Luzon Renewables also completed its 81-MW wind farm and has, likewise, been operational

Continued on A8 See “Catastrophe,” A8

PESO ExchangE ratES n US 44.4120 n jaPan 0.3729 n UK 66.3071 n hK 5.7296 n chIna 7.1670 n SIngaPOrE 32.9002 n aUStralIa 34.6157 n EU 47.7962 n SaUDI arabIa 11.8429 Source: BSP (17 April 2015)

COOLING OFF Locals beat the summer heat by taking a dip in one of the coldest waters in the Philippines at Majayjay Falls, located at the foot of Mount Banahaw in Laguna. Others call it Taytay Falls, or even Imelda Falls, because former First Lady Imelda Marcos financed the promotion of tourism in this place. ALYSA SALEN

www.businessmirror.com.ph n Tuesday, November 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 6 sections 28 pages | 7 days a weekn saturday, april 18, 2015 Vol. 10 No. 191

A broader look at today’s businessBusinessMirrorthrEE-tImE

rOtary clUb Of manIla jOUrnalISm awarDEE2006, 2010, 2012U.n. mEDIa awarD 2008

Phl wEIghS cataStrOPhE bOnDS tO SlaSh cOStS

All systems go for Ayala wind farmsErc grantS cErtIfIcatE Of cOmPlIancE tO wInD-POwEr PrOjEctS In IlOcOS nOrtE

PlDt OUtlOOK rEmaInS StablE–mOODy’S

CITIes OF The FuTure Palafox architecture President and International real estate Federation (Fiabci)-Philippines President Felino Palafox Jr. opens the 19th Fiabci asia Pacific regional secretariat summit, with the theme “Cities of the Future: asia Pacific,” held at a hotel in Pasay City. The summit brings together international and prominent speakers in a program filled with timely information pertaining to global real estate. ALYSA SALEN

By Bianca Cuaresma

The recent sale of Philippine Long Distance Telephone Co.’s (PLDT) Manila electric

Co. (Meralco) shares should not ad-versely impact its credit standing at present or its outlook down the line, according to the global credit watcher Moody’s Investors Service.  Moody’s said on Friday the re-duction of PLDT’s investment in Meralco has no impact on PLDT’s credit standing and should, in

fact, prove “mildly credit positive” for the local telecommunications giant. PLDT recently announced it has sold its 10-percent ownership of Meralco to Metro Pacific Invest-ments Corp. (MPIC), effectively in-creasing MPIC’s exposure to Meralco by 15 percent.  The stock was previously held by Beacon electric Asset holdings Inc. (Beacon, unrated), a special- purpose company owned jointly by a PLDT subsidiary, PLDT Com-munications and energy Ven-

tures, and by MPIC.  “[This is] mildly credit-positive, although it will not affect PLDT’s “Baa2” rating and stable outlook. PLDT could potentially receive P4 billion from the transaction,” Moody’s said.  The Beacon made a similar transaction in June 2014, when it sold 56.35 million Meralco shares to MPIC, with a total proceeds of P13.24 billion.  Moody’s, however, clarified that the recent PLDT transaction

should not, in any way, affect the current credit standing of the company, and that the outlook for PLDT remains stable.  “PLDT benefits from a dominant position in a duopolistic market, with subscriber-market shares of 61 percent in wireless, 70 percent in fixed-line voice and 59 percent in broadband. “The company also has strong liquidity helped  by excellent access to the local bank and bond markets,” Moody’s said.

BusinessMirror news@businessmirror.com.ph Saturday, April 18, 2015A2

Newsthe country $871 million. In the most recent major quake, in 2013, about $50 million of damage was done on Cebu and Bohol islands. There are $22.8 billion of catastro-phe bonds outstanding worldwide, ac-cording to Bloomberg-compiled data. Mexico obtained $315 million of nat-ural-disaster protection via the debt in October 2012. The three-year securities were over-subscribed by 200 percent to 450 percent depending on the peril insured and class of notes issued, according to a statement by the World Bank, which arranged the sale. Mexico was able to achieve terms that were highly competitive with more traditional reinsurance, the multilateral lender said in the statement.

Fast growthThe complexity of pricing and model-ing disaster risk has delayed the Philip-pine offer, Tan said. The nation wants a structure where proceeds are generated and the servicing can be offset in the event of a calamity, he said. Under the stewardship of President Aquino, the Philippines has become Southeast Asia’s fastest-growing econ-omy. GDP rose 6.1 percent last year, fol-lowing increases of 7.2 percent in 2013 and 6.8 percent in 2012. There would probably be strong de-mand for a catastrophe bond offer from the Philippines, said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc., a buyer of the coun-try’s dollar debt. “People will take it, especially after the Philippines’s upgrade to an invest-ment rating,” he said in an interview in Manila on Thursday. “The market is hungry for yield.” The nation, which Moody’s Inves-

tors Service rates two levels above junk, has a five-year credit-default swap rate of 88.5 basis points. That compares with Thailand and Malaysia, where the similar costs to insure debt against nonpayment are 103 and 123 points, respectively.

‘Several structures’The Philippines last sold dollar bonds in January, issuing $2 billion of 25-year notes at a record low yield of 3.95 per-cent in an offer that was seven times oversubscribed. The securities yielded 3.54 percent on Thursday. Catastrophe bonds are “not an as-set class I am very familiar with,” said Benjamin Cryer, a Singapore-based portfolio manager for the Franklin Asia Credit Fund of Franklin Temple-ton Investments. “I’m sure there will be a buyer there, I’m just not sure we are among them.” The disaster preparedness of Philip-pine local governments is more reac-tive than proactive and 16 major cities aren’t ready for the effects of climate change, according to an April 13 story in the Philippine Daily Inquirer that cited a study by the World Wildlife Fund and the BPI Foundation. The decision on whether the country goes ahead with the proposed sale will depend on more talks with the World Bank, Tan said. The multilateral lend-er issued catastrophe bond linked to earthquake and tropical cyclone risk in 16 Caribbean countries in June 2014, it said in a statement. “Investors are familiar with the World Bank because they’ve been is-suing cat bonds on behalf of other countries,” Tan said. “We’re discussing several structures with them but there’s nothing firm.” Bloomberg News

Catastrophe. . . Continued from A8

Group of 20. . . Continued from A8

remains moderate and uneven.”She said the goal of this week’s talks was to produce a revamped action plan that will “prevent this new mediocre from becoming the new reality.” The IMF’s latest economic forecast predicted only modest overall growth and downgraded the prospects for some nations including the US, forecasting US growth of just 3.1 percent this year, a half-point lower than its January estimate. The reason:

IMF economists believe the sharp rise in the value of the dollar will hurt American companies trying to export goods overseas. Growth prospects in oil-ex-porting nations are being hurt by the big drop in oil prices over the past year, but those declines are ex-pected to boost prospects in many oil-importing countries. The IMF this week also raised new concerns that severe volatil-ity in financial markets could be triggered if the Federal Reserve

moves, as is widely expected, to start raising interest rates later this year. If the Fed’s rate hikes after a prolonged period of ultra-low rates cause investors to rush for the exits, it could cause stock prices to tumble and interest rates to rise sharply. Previewing the G-20 discus-sions, Babacan told reporters on Thursday that the G-20 countries needed to do more to carry out commitments they made last year to jump-start growth by investing

in infrastructure projects and re-moving barriers to trade. “Growth is there, but it is weak ...and uneven,” he said. The fi-nance ministers will produce an action plan that will be discussed by President Barack Obama and other G-20 leaders at a scheduled summit meeting in Turkey in November. The finance officials are trying to achieve the goal of boosting global economic output by more than $2 trillion over the next five years. AP

China’s island-building program in the south China sea (West Philippin sea) may result in it

gaining control of some of the world’s most important waterways, the Us’s most senior military commander for asia said.

China may gain control of South China Sea, US Navy says

“If this activity continues at pace, is that it—those would give them de facto control” of the mari-time territory they claim, Adm. Samuel Locklear, head of the US Pacific Command, told the US Senate. Locklear said China could instal l long-range detection radars, base warships and war-planes on the islands, potentially giving it the ability to enforce an air defense identification zone. Satellite photos this month showed images of Chinese

dredgers at work at Mischief Reef in the Spratly Islands, a feature also claimed by Vietnam, the Philippines and Taiwan. Presi-dent Barack Obama said on April 10 that the US is concerned that China is using its “muscle and power” to dominate smaller coun-tries in the region. Locklear said the pace of China’s building program was “astonish-ing” and added that the islands would improve China’s ability to locate a maritime security force

in the waters that would be larger than the combined coast guards of the Southeast Asian countries. China claims about four-fifths of the South China Sea, home to some of the world’s busiest ship-ping lanes, under a so-called nine-dash line drawn on a 1940s map. Vietnam, the Philippines, Taiwan, Malaysia and Brunei Darussalam also claim territory in the waters.

Minimum defenseChINA says it has a right to carry out construction work on its sovereign territory in the South China Sea. “It certainly complicates the se-curity environment,” Locklear said. efforts by Asean to work with China to develop a code of conduct in the South China Sea haven’t “produced very much at all.” Locklear said the US has re-invigorated its alliance with the Philippines and is looking at help-ing its government improve its

minimum defense. To help improve security in the region, the US had also developed partnerships with nations that it wouldn’t have considered pos-sible over the past two decades, he said, citing Vietnam, Malaysia and Indonesia. Locklear said the increasing number and technical sophisti-cation of the submarines in the Indo-Pacific was changing the dynamic of how the US navy op-erates in the area. he estimated that of the 300 submarines in the world that aren’t US vessels, 200 are in the Indo-Pacific, which, he said, was the “most militarized part of the world.” Locklear said Asian nations are building their submarine capabili-ties because they understand the vessels afford them the ability to deny access to enemies, as well as their value as a deterrent.

Bloomberg News

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Saturday, April 18, 2015 A3BusinessMirrorThe Nation

By Butch Fernandez

PRESIDENT Aquino confirmed on Friday his determination to push adoption and early enforcement

by the Association of Southeast Asian Nations (Asean) of a binding Code of Conduct covering conflicting claims over potentially resource-rich territories on the West Philippine Sea.

“Syempre, sa nalalapit na pagpun-ta natin sa Malaysia para sa Asean [meeting] uulitin natin ang panawa-gan natin para mabuo na ang tinata-wag na Code of Conduct,” Aquino

told reporters, baring plans to raise the sea-row issue at the up-coming Asian Leaders Summit in Kuala Lumpur on April 26 and 27.

Aquino recalled that efforts

to enforce such a Code to ensure peaceful resolution of territorial disputes in the region began way back in 2002, but he lamented that it has yet to bear desired results.

“Noong 2002 pa kasi sinubukang gawin iyon, hindi nagawa; lumabas iyong DOC [Declaration on Conduct of Parties in the South China Sea], pati iyong DOC. Sa ating pananaw, mukhang naba-violate na ngayon kaya lalong imperative na itulak natin ang pagsulong nitong Code of Conduct,” the President said.

Aquino added: “At sana, umusbong na magkaroon na ng start ang formal talks sa pagpo-formulate nitong Code of Conduct.”

He explained that he was im-pelled to do this because of the alarming rate and magnitude of China’s reclamation activities in Philippine claimed territory,

which he deems brazen violations of the existing Declaration of Code of Conduct earlier adopted by Asean and China itself.

Aquino disclosed this a day after Australian Ambassador Bill Twedell also weighed in on the issue voicing a series of concerns over reported ongoing Chinese reclamation activi-ties in disputed territories.

“We will just remind them [Asean

leaders],” Aquino said explaining: “Ipapaalala lang natin, siyempre, da-pat mabahala tayo doon sa nangya-yaring [Chinese] reclamation nga-yon—No. 1.

Aquino, at the same time, aired apprehensions over Chinese au-thorities’ imposition of a fishing ban even on waters covered by the Philippine exclusive economic zone.

“Dati, sinabihan tayo na mayroon silang mga patakaran, lalo na sa fish-ing na hindi lang nila ini-enforce. Ka-pag in-enforce nila, parang kailangang humingi na tayo [ng] permiso para mangisda sa ating exclusive economic zone,” Aquino said.

The President, however, held out hopes that “goodwill” would continue to prevail over claimants to enable them to resolve the con-flict through “peaceful means in conformity with International law.”

By Marvyn N. BenaningCorrespondent

PARTY-LIST Rep. Neri J. Col-menares of Bayan Muna led activists in picketing the Chi-

nese consulate and in denouncing Beijing’s 62-hectare reclamation project in the disputed Panganiban Reef or Mischief Reef in the West Philippine Sea (WPS).

Colmenares, a lawyer, said the area lies squarely within the exclu-sive economic zone (EEZ) of the Phil-ippines, which should be respected by China and all other countries that have laid claims on atolls, reefs and sandbars on WPS.

“China should stop its reclama-tion activities now and, instead, just engage us in the international tri-bunal if, indeed, they have the legal basis and evidence to do so. As it is China’s expansionist policy based on its nine-dash line theory is with-out legal, historical and moral basis. Every Filipino should defend our ter-ritory and EEZ and President Aquino should fortify our positions in the area to counter China’s aggressive acts,” Colmenares said.

Bayan Muna has been critical of China’s moves in the area and ex-plained that its 1947 map, crafted by the Kuomintang government, was not accepted by the Beijing government led by Chairman Mao Zedong of the

Communist Party of China, but is now regarded by President Xi Jinping as a “historical document” that has be-come the basis for his staking a claim on 80 percent of the WPS.

Since 2008 Bayan Muna had been pushing for a stronger Philippine po-sition on the WPS dispute and even worked to scrap agreements with China on the bilateral development of purported gas fields in the area.

Members of Bayan Muna toted placards in Chinese characters saying “No to China’s reclamation of Mischief Reef!,” “China Out of Philippine Seas!,” and “Assert Phil-ippine Sovereignty!”

Meanwhile, Party-list Rep. Carlos Zarate of Bayan Muna said, “Presi-dent Barack Obama’s statement on China’s expansion is a calculated re-sponse but the US would not risk a war with China because its economy would collapse without China. The US owes China at least $1.28 trillion and has a total of $579 billion in an-nual trade with China, compared to only $17.6 billion in its trade with the Philippines.”

Zarate added: “All the US would do is posture that it would defend the Philippines, but it will not. That is the hard and cold reality, so it is best that we build our strength and rely on our own resolve with the help of the international community to defend our sovereignty.”

By Recto Mercene

THE Department of Foreign Af-fairs (DFA) on Thursday night lauded the G7 Foreign Minis-

ters declaration, in Lubeck, Germa-ny, expressing concern on “unilateral actions, such as large-scale land rec-lamation, which changed the status quo and increased tensions.”

The G7 declaration also called for international efforts “to strengthen maritime governance in pursuit of rules-based, sustainable use of seas and oceans.”

The G7, or ‘Group of 7,’ is a forum of the world’s most industrialized economies initially comprised of six nations: France, Germany, Italy, Japan, the US and UK and Canada, which joined in 1976. The European Union is alo represented within the G7, representing more than 64 per-cent of the net grobal wealth ($263 trillion), according to the Credit Suisse Global Wealth Report Octo-ber 2014.

Although the forum did not name names, it was clear that they were referring to China, which has been engaged in an ongoing massive land-building reclamation, now referred to so as “China’s wall of sand” in the contested West Philippine Sea (WPS).

“The Philippines welcomes the declaration as it underlines the in-ternational community’s commit-ment to uphold the principles of international law, in particular the 1982 United Convention on the Law of the Sea, which underpin the sta-ble maritime code that serves our common interests,” the DFA added.

“The Philippines reiterates its call for a stop to unilateral actions that violate the 2002 Asean-China Dec-laration on the Conduct of Parties in the South China Sea and interna-tional law. Such actions undermine efforts to pursue the peaceful, rules-based resolution of the disputes in the South China Sea and to promote regional stability,” the DFA added.

The Philippines has lodged protests against China before the Permanent Court of Arbitration in The Hague. The DFA said the aggressive land reclamation aims to change the land features of the area and validate the legality of the nine-dash line.

On Wednesday Foreign Affairs Secretary Albert F. del Rosario said on television that the US is looking at sending advanced air and naval support to the Philippines amid the country’s simmering dispute with China over the WPS.

Del Rosario quoted US Defense Secretary Ashton Carter as saying that the US is looking at deploying to the Philippines various advanced air force, naval and maritime domain equipment.

Del Rosario made the revelation after President Barack Obama criti-cized China for using its “sheer size and muscle” in staking its claim to the disputed waters.

The Obama administration’s lat-est foreign affairs foray in the WPS was, apparently, in response to the demand of several US senators that a formal strategy be put in place to combat what they see as threat to its own hegemony.

Republican Senators John Mc-Cain and Bob Corker have teamed up with two Democrats, Jack Reed and Bob Menendez, to draft a letter to US Secretary of State John Kerry and Carter.

In the letter, the four demanded crafting of a comprehensive strategy to counter China’s land reclamation attempts in the SCS.

“Without such a plan, long-stand-ing interests of the US, as well as our allies and partners, stand at consid-erable risk,” they said.

The letter makes specific mention of Gaven Reef, which is within the Spratly island group. A second instal-lation is in Johnson Reef, once an entirely submerged formation, but has since been built into a 25-acre artificial landmass.

China told: Prove WPS claim before intl court

Aquino bent on pushing Asean adoption of Code of Conduct on sea row with China

By Joel R. San Juan

DATATRAIL Corp., the private company tapped by the Bureau of Immigration (BI) to make ID

cards for nonimmigrant foreigners in the country, on Friday, denied reports that it owes the government P600 mil-lion and that its contract with the government had already lapsed.

Reacting to the Commission on Audit’s (COA) 2013 Annual Audit Re-port of the BI, Datatrail lawyer Raffy de Castro pointed out that the re-port, particularly on the collection of the alleged P600-million under remit-tance by the Build-Operate-Transfer (BOT) proponent suffers from grave legal errors, and that implementing the same faces serious legal impediments.

De Castro said contrary to the report of the COA resident auditor, it was the government, and not the private propo-nent, that initiated the amendment of the BOT contract.

In its recently released audit report, the COA said the BI’s BOT contract signed with the J. Serrano Trading Corp., now known as Datatrail Corp., in December 2003, should have already been terminated as the 10-year agree-ment had lapsed.

Thus, the COA said, “all the rights, title and interest in and to the facilities,

fixtures and equipment should be trans-ferred to the BI.”

The contract covers the automation of the Alien Certificate of Registration (ACR) Identity Cards that the bureau issues to foreigners with tourist visas to prove that they are not overstay ing in the country.

It was really intended to replace the paper-based ACR cards with the high-tech and micro-based ACR I-Card.

The contract was approved by the National Economic and Development Authority (Neda) on a “no-objection basis” on the condition of a 50 -50 an-nual revenue sharing and with an an-nual guaranteed payment of P30 million from Datatrail.

The COA, however, noted in its report that, on March 29, 2007, the annual rev-enue-sharing provision of the contract was amended to 67 percent to 33 percent in favor of Datatrail.

The COA said both parties also agreed to extend the contract to 21 years.

These amendments, according to the COA, were disadvantageous to the gov-ernment and must be considered “legal-ly void” as these did not have approval from Neda.

But de Castro pointed out that records would show the P600 million being col-lected by COA was never generated by the project, owing to the extension in the

validity of the ACR I-Card from one year, as contained in the original BOT agree-ment, to five years as directed in 2005 by then-President Gloria Macapagal-Arroyo as chairman of the Neda Board.

De Castro explained that 70 percent of the ACR I-Card holders under the original BOT contract are permanent residents.

“It was originally a ten-year contract. The President instructed that the valid-ity of the cards for 70 percent of the uni-verse be for five years. It is as simple as that,” he added.

“The COA Audit Report boils down to a COA resident auditor, unilaterally declaring that the interpretation of the Neda Board, as represented by the Eco-nomic Planning secretary, is erroneous,” de Castro said.

He added that the COA resident au-ditor insisted in using the 2006 imple-menting rules (IRR) of the BOT law, and conveniently disregarded the fact that Section 15.3 of the Transitory Provi-sions of the 2006 IRR states that “for projects endorsed by the agency or local government to the approving body be-fore the effectivity of the amendments to these revised internal rate of return, the previous IRR shall govern’.”

“This is the very reason the Neda had consistently advised the BI that the ap-plicable law is the 1999 IRR of the BOT law,” he added.

SKYWAY Stage 3 proponent Citra Central Expressway Corp. (CCEC) announced on Friday that it will conduct a traffic dry run or simu-lation along a 200-meter stretch of Osmeña Highway below the

Skyway Buendia section between column S1-001 and S1-004 and along a 365-meter portion of Araneta Avenue between Imelda Street and E. Rodriguez Boulevard.

The weeklong dry run will start at 6 a.m. on Saturday.CCEC will soon start to mobilize for Skyway Stage 3 construction in

Makati and Quezon cities, which necessitates lane reduction to board up the work site at the road median. For the dry run in Makati, four of the ex-isting southbound lanes and three of northbound lanes will be reduced to two lanes each direction, technically leaving two lanes on both directions for use by motorists.

The innermost northbound lane will initially be closed to traffic during the dry run. All vehicles going to Quirino Avenue and Nagtahan via Buendia Flyover should stay on the left lane, and vehicles going to Makati central business district, Chino Roces Avenue and Buendia Avenue are advised to keep right. Meanwhile, in Quezon City, the four standard southbound lanes and the three standard northbound lanes will be reduced to three substandard 2.5-meter wide lanes.

The CCEC traffic management group, the Metropolitan Manila Develop-ment Authority (MMDA) and the traffic units of Makati and Quezon cities will jointly undertake the weeklong dry run to assess the traffic behavior in affected areas prior to the implementation of the final traffic management that may require some adjustments.

CCEC, MMDA and the traffic units of Makati and Quezon cities appealed for public understanding and cooperation and apologize for any inconven-ience that this activity may cause.

The Skyway Stage 3 project is a 14.8-kilometer elevated expressway with eight access points in strategic locations that will connect South Luzon Expressway with North Luzon Expressway from Buendia in Makati City to Balintawak in Quezon City. The project aims to decongest traffic on Metro Manila’s major thoroughfares, like Edsa, C-5 Road and Central Manila.

DFA welcomesG7 stand onWPS claims

BI card supplier to COA: What P600-M debt?Traffic dry run on Osmeña Highway, Araneta Avenue starts Saturday

aquino

WoRLD CLaSS Gen. Gregorio Pio Catapang Jr. (right), armed Forces chief of staff, displays the iSo 9001:2008 Certificate with Col. alvin Francis a. Javier, Procurement Service commander, during service’s 10th founding anniversary celebration at Tejeros Hall of the armed Forces Commissioned officers Club in Camp General Emilio aguinaldo, quezon City. Catapang was the keynote speaker during the event. NONOY LACZA

By Kris M. Crismundo | Philippines News Agency

The Asean economic Com-munity (AeC) that will take place at end-2015 will hasten

the role of Southeast Asia to become a global hub for manufacturing and services, with the Philippines and Malaysia leading the region in infor-mation technology-business process outsourcing (IT-BPO) industry.

PHL, Malaysia lead Asean as global IT-BPO hub

IHS, a United States-based think tank, said on Friday that the full implementation of AEC this year will accelerate the region’s growth in sectors of manufacturing and services, in which the 10 member-states have their own share on the rise of Asean economy.

IHS East Asia Pacific chief econo-mist Rajiv Biswas said the Philippines and Malaysia will be the major global hubs for IT-BPO industry due to the large pool of university-educated

and strong English-language skills of the work force of both countries.

Biswas highlighted the strong IT-BPO in the region, as export revenue of the sector grew more than double between 2008 and 2014, employing over a million personnel.

For the Philippines, the indus-try posted an 18.7-percent revenue growth in 2014 to $18.4 billion.

The country is also projected to have 1.3 million employees by 2016.

“The rapid growth of this industry

is also driving economic development in a number of cities across the Philip-pines, with Manila and Cebu now ranked among the world’s leading IT-BPO hubs,” Biswas said.

He mentioned that there is also a rapid growth of the IT-BPO sector in Ma-laysia, with Kuala Lumpur and Penang being developed as major IT-BPO hubs.

“A new IT-BPO Park is being built in Penang, which is expected to cre-ate around 21,000 new IT-BPO jobs by 2020,” he added.

Meanwhile, the IHC economist said the Greater Mekong Subregion—com-posed of Vietnam, Myanmar, Thailand, Cambodia and Lao PDR—is set to become the next manufacturing hub for Asean.

Vietnam, in particular, is seen as the electronics manufacturing hub in the re-gion with multinational electronics firms repositioning their production in the said country. Thailand and Indonesia are still the top destinations for automotive and parts production, while Singapore re-mains the leading hub for maintenance, repair and overhaul industry.

“The Asean region is already expe-riencing rapid economic growth, and further economic liberalization and integration of the Asean economies is poised to trigger more rapid economic development,” Biswas noted. Sweet deal a man working for a sugar merchant at a Quezon City public market repacks white and brown sugar for retail to market-

goers and consumers. the Sugar Regulatory administration has reported that the price of the commodity has been rising on the back of strong market demand. NoNoy Lacza

Two Bureau of Customs (BoC) ports have raked in a combined P837 million from the public auctions of

forfeited imported goods in 2014.In a news statement released on Fri-

day, the BoC said the revenue collected by Port of Manila (PoM) and the Manila International Container Port (MICP) also made up around 95 percent of the total auction revenue amounting to P885 mil-lion in the same year.

Aside from the said ports, other col-lection districts that contributed to the bureau’s 2014 auction revenue included the Ports of Cebu with P48 million, Subic

with P636, 679 and the Ninoy Aquino In-ternational port with P43,000.

The MICP generated a total of P580 million from a record 17 public auctions last year, up 346 percent from the P130-million auction revenue target for 2014.

The increase in the auction proceeds was attributed to the sale of over 300 container vans of rice in September last year, which earned over P393 million.

on the other hand, the PoM gener-ated sale amounting to P257 million from six public auctions, or 150 percent more than the revenue target of P103 million. The biggest contributor was the auction

of about 109,500 sacks, amounting to P161 million last october.

“Aside from raising revenues for the government, the public auctions of for-feited goods has also helped in decon-gesting the ports,” Customs Commis-sioner John Sevilla said.

“we will continue to expedite the disposition of forfeited shipments in the coming months,” he said.

Meanwhile, the BoC-Port of Cagayan de oro is set to auction off over 33,000 sacks of seized smuggled rice on wednes-day. The sale is expected to generate a minimum of P70.5 million in revenue. PNA

POM, MICP earn P837M from sale of smuggled goods

By Lenie Lectura

THE National Transmission Corp. (Transco) has submit-ted to Energy Secretary Car-

los Jericho L. Petilla a report on the seven-hour power shortage that hit Mindanao on Easter Sunday.

Petilla, who received the re-port the other day, said he has yet to review it. The energy chief formed a group to come up with a detailed report on the Mindanao- wide blackout.

“We sent the preliminary report to the Department of Energy [DOE] on Thursday,” Transco President Rolando Bacani said.

He said the main cause of the brownout was traced to a “corroded suspension insulator shank” that “gave way,” causing the “transmis-sion line to fall and hitting the other line conductors and tower parts.”

This, he added, resulted in a short circuit “which was not iso-lated on time.”

The power outage started at 7:50 a.m.  Power was restored after seven hours.

Bacani said Mindanao, particu-larly in Zamboanga, continues to experience limited power supply.

Mindanao’s gross power reserve on April 18 stands at 74 megawatts (MW); 134 MW on April 19; and

56 MW on April 20.“In Mindanao there are areas

having rotational brownouts due to power supply contracting deficiency by distribution utilities and low out-puts from hydropower plants,” DOE Director Myleen Capongcol said in a text message.

Bacani added that Transco rec-ommended an immediate inspec-tion or a replacement of all suspen-sion insulators in the area, consider-ing that these were installed a long time ago and a thorough inspection was wanting.

“We also recommended the im-mediate review of the timing coor-dination of protective relays and the installation of new and back-up protection as the case may be. These are just some of the recommenda-tions included in our report to the DOE,” the Transco official said.

Petilla also said his office would conduct an investigation involving Therma South Inc. (TSI), a subsid-iary of AboitizPower, whose power facility in Davao City was dam-aged by the recent Mindanao-wide blackout.

The property damage will delay the commercial operations of Unit 2 by approximately 10 months, or un-til February 2016.  Unit 1 and Unit 2 of the power plant have yet to be turned over to TSI by its contractors.  

TSI was scheduled to synchro-nize Unit 2 with the Mindanao grid last week. Full commercial op-erations was supposed to happen a month after.

“My question to them is simple. Where is their circuit breaker? Why are they the only ones affected? They can say all they want but they are a party of interest. We will in-vestigate this,” Petilla said.

When sought for comment, TSI President Benjie Cariaso Jr. said the company is also concerned about the incident. “We are also conducting our own investigation, assisted by a third-party consultant, to deter-mine the root cause of the incident.”

The auxiliary components to the boiler of Unit 2 of TSI’s 300-MW coal power plant were damaged. Affected areas and components include the air-preheater, as well as the electrostatic precipitator, which is part of the power plant’s pollution-control system.

More than 20 distribution utilities and electric cooperatives have signed up to receive capacity from TSI. 

The TSI official assured the pub-lic that the status of Unit 2 will not affect the  commissioning of Unit 1, which remains on schedule and should reach commercial operation by the end of June this year.

Transco files report on 7-hour power outage in Mindanao on Easter Sunday

briefs

Saturday, April 18, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

EconomyBusinessMirrorA4 news@businessmirror.com.ph

The Philippine economic Zone Authority (Peza) has approved the project of Japanese firm Seiki Corp.Peza Director General Lilia B. de Lima and Seiki hot Runners Philippines Inc. Director Yuichi Marukawa signed a registra-

tion agreement making Seiki as a new information-technology (IT) enterprise in Light Industry and Science Park III (LISP III) in Santo Tomas, Batangas.

Seiki’s facility will develop and produce design of mold, dies and drawings of mold, as well as assembly process and procedures.

In its web site, Seiki said its Batangas facility will be set up next month to support its expansion in Southeast Asia.“we are committed to enhancing our business expansion and sale promotion in Southeast Asia, improving service to en-

able fulfillment of customer satisfaction,” the Japanese firm stated. PNA

PEZA APPROVES SEIKI CORP.’S PROJECT

SSS ISSUES WARNING AGAINST DELINQUENT EMPLOYERSThe Social Security System (SSS) warned all delinquent member-employers to strictly comply with Republic Act (RA) 8282, or the Social Security Act of 1997, by promptly paying the contributions and salary-loan payments of their employees and remit these to the SSS.

SSS Senior Vice President and Chief Legal Counsel Voltaire P. Agas issued the warning after 14 employers were convicted for violating RA 8282.

These cases were sourced from 2012 to 2014 records in various regional trial courts nationwide for nonremittance of pre-mium contributions with incurred penalties amounting to P20.2 million.

“we would like to inform the public, especially the employers, that we are seriously and aggressively pursuing cases against erring employers to protect our SSS members from such violations that prevent them from enjoying the full SSS ben-efits due them,” Agas said.

Under Section 28(e) of the Penal Clause of RA 8282, failure or refusal of an employer to register their employees, or to de-duct contributions from the employee’s compensation and remit the same to the SSS, corresponds to a penalty of fine from P5,000 to P20,000 and imprisonment from six to 12 years. PNA

Filipinos top global net surfers–Nielsen

By Cai U. Ordinario

Filipinos ranked the highest world-wide in terms of their desire for con-stant connectivity to the internet and

other media, according to global market research firm nielsen.

Nielsen Philippines said Filipinos who enjoyed the freedom of constant connectiv-ity is 94 percent, the highest in the region. This is also significantly higher than the global average of 76 percent. 

The desire for “always-on” connectivity was also high in Thailand and Vietnam at 88 percent, while 86 percent of Singapor-eans and 84 percent of Malaysians en-joy the freedom of being connected any- where anytime.

“Increasing access to all types of content across a multitude of platforms coupled with the passion for social media is af-fecting how we consume media,” Nielsen Philippines Managing Director Stuart Ja-mieson said. 

“Tap into the viewers’ desire to be part of a collective conversation to encourage them to tune in live. Second-screen strate-gies should include an interactive or social component that allows users to interact and turn the program into a ‘can’t miss’ event or experience,” he added. 

Further, Nielsen said live video program-ming holds potent appeal for consumers in the Philippines, Indonesia and Vietnam, particularly content linked to social media. 

Data showed that more than three quar-ters of Indonesians, or 77 percent, said they prefer to watch video programming live, the highest globally. This was followed by Filipinos and Vietnamese at 76 percent. 

The Philippines, along with Thailand, Vietnam and Indonesia, rank in the top 10 countries globally when it comes to watch-ing more live video programming content when it is tied to social media. 

Time-shifted programming is also popular among Filipino consumers with 78 percent, saying that watching time-shifted programming better accommodate their schedules. 

This was slighly lower than 84 percent of Indonesians and higher than 74 percent of Vietnamese and 73 percent of Singapor-eans. The Philippine average is also higher than the 71 percent recorded in Malaysia and Thailand, as well as the 64 percent posted globally. 

“A large proportion of Filipino viewers also access video content via catch-up TV, with many reporting to often watch several episodes on the same day,” Nielsen said. 

In terms of connected device owner-ship, the Philippines continues to expand the prevalence of dual-screening in the country. Globally, the Philippines ranks highest in browsing the Internet while watching video programming at 76 per-cent. This was followed by Thailand and Vietnam also at 76 percent and Indonesia at 70 percent. 

Nielsen also said Filipinos are the most likely to engage others via social media while watching video program-ming at 70 percent, followed by Thais at 68 percent. Vietnamese and Indone-sians are also avid users of social media during screen time at 62 percent and 59 percent, respectively.

The Nielsen report is based on a survey of 30,000 online respondents in 60 coun-tries to understand how the changing digi-tal landscape is affecting how, where and why we watch video programming. 

Video programming was defined as any type of content, such as TV, cable shows, professional video or user-generated content that is watched on a television, PC, mobile device such as a phone, tablet or e-reader. 

The study also examines consumption preferences for video programming, in-cluding the devices most commonly used for selected genres and the devices used to view video at home and on the go.

BusinessMirrorSaturday, April 18, 2015news@businessmirror.com.ph A5

Economy

briefsFor failing to pay a mandatory P500 fine after he was caught in the act of throwing a cigarette butt in Guadalupe, Makati City, two years ago, a seaman bound to Singa-pore was not allowed to take his flight after his name was included in the alert list of the Bureau of Immigration, the Metropolitan Manila Development Authority (MMDA) said on Friday.

MMDA Chairman Francis N. Tolentino said raul Samson, seaman, who was ap-prehended sometime last week at the airport after he failed to settle the manda-tory fine for violation of republic Act 9003, or the Ecological Solid Waste Manage-ment Act of 2000.

In her report submitted to Tolentino, Betty M. Gendeve, MMDA chief health program officer, said that Samson was apprehended on April 25, 2013, by Nieves Bunag, a depu-tized MMDA environmental enforcer after he threw a cigarette butt at the Metro rail Transit system Edsa-Guadalupe station. Claudeth Mocon-Ciriaco

A ToTAl of 19,946 suspect dengue cases was reported nationwide from January 1 to April 4, 2015, the Department of Health (DoH) said on Friday.

The DoH said that the figure is 6.49 percent higher compared to the same time pe-riod last year at 18,730.

Most of the cases were from the following regions: region 4A, 18.4 percent; region 3, 13.7 percent; National Capital region, 13.2 percent; region 10, 11.2 per-cent; and region 7, 6.6 percent.

Ages of cases ranged from less than 1 month to 97 years old (median = 13 years). Ma-jority of cases were male at 54.5 percent.

 Most reported of the cases belonged to the 5 to 14 years age group 38.7 percent. There were 53 deaths recorded. Claudeth Mocon-Ciriaco

THE Department of Public Works and Highways-National Capital region (DPWH-NCr) will undertake road reblocking and repair starting at 10 p.m. on Friday to 5 a.m. on Mon-day on the following roads in the cities of Quezon and Pasig:

QUEZoN CITY1. Along Mindanao Avenue from Cattleya Street to road 8 (third lane, South bound);2. Along E. rodriguez Jr. Avenue/C-5 from Calle Industria Street to ortigas Avenue

(third lane from sidewalk, South bound); 3. Along C.P. Garcia Avenue from Velasquez Street to Katipunan Avenue (third lane,

East bound); and4. Along Batasan road from Sinagtala Street to Filinvest I (second lane, West bound).PASIG CITY 1. Along C-5 road from Pasig Boulevard to Bagong-Ilog Service road (South bound). PNA

SEAMAN FAILS TO LEAVE COUNTRY FOR FAILURE TO pAY p500 LITTERING FINE

dENGUE CASES ROSE 6.49% bETwEEN jANUARY ANd ApRIL–d.O.h. REpORT

dpwh-NCR UNdERTAkES wEEkENd ROAd REbLOCkING, REpAIR

Saturday, April 18, 2015

OpinionBusinessMirrorA6

April is Broadcasters’ Montheditorial

OF all the marvelous inventions of the 20th century that changed the way we live, one has probably directly impacted the most people in the world.

On December 17, 1902 a transmission from the Marconi station in Glace Bay, Nova Scotia, Canada, became the world’s first radio message to cross the Atlantic from North America. Now, more than 100 years later, virtually ev-eryone is able to take advantage of radio broadcasting.

In nearly every remote corner of the globe, radio is available. Even people without access to electricity can follow global events on an inexpensive battery-operated radio. It is a lifeline during disasters, a real-time source of news and embodies personal entertainment.

It is only in the last 20 years or so that television has been widely available in the Philippines. Even today, in most of the remote areas of the country, radio is the communication of choice. In the urban areas, radio is an integral part of millions of Filipinos’ daily lives. Radio broadcasting, in particular, is critical to nation-building as it allows the public to be exposed to a wide vari-ety of viewpoints and opinions.

Unlike television with its high infrastructure cost for both the broadcasters and also the consumers, small radio stations can be a local enterprise serving the needs of small communities. Local radio stations can more easily address local needs and concerns that are often missed by the national networks. While many radio networks have a number of individual stations, each station oper-ates within its own community.

There are nearly 400 AM radio stations, as well as 600 FM stations, with about 300 television stations broadcasting every day. Many broadcasters or-ganized in 1973 as the Kapisanan ng mga Brodkaster ng Pilipinas (KBP) to promote professional and ethical standards in Philippine broadcasting both in radio and television.

The KBP is celebrating its 41st founding anniversary and Broadcasters’ Month during April. Its Golden Dove Awards honors the best in radio and television programming, from sports and public-service education to news and entertainment.

The BusinessMirror’s sister company, Aliw Broadcasting Corp., is an important part of bringing radio to the homes of millions of Filipinos. Aliw is one of the largest radio networks in the country with its AM station DWIZ and Home Radio on FM as its flagship stations. Founded in 1991, Aliw Broad-casting broadcasts “Home Radio” from General Santos City to Dagupan and Palawan. DWIZ is the voice of Mega Manila with the slogan “Mas Todong Lakas at Mas Pinakikinggan ng Buong Bansa!”

We congratulate the KBP on its anniversary and commend the dedicated journalists in the radio and television broadcast industry.

ONLY in the United States in 2015 would this be the lead story in the newspapers and on the media. Workers in fast-food restaurants were protesting again this past week for a raise

in their wages. They are asking for an increase to $15 per hour which is from 50 percent to 70 percent more than these workers now earn.

Making money from poverty

Here is a quote from Reuters.com about the situation: “Jumal Tarver, 36, said he cooks and cleans at a fran-chised McDonald’s in Manhattan but cannot make ends meet on his pay of $8.75 per hour. He said he must rely on public assistance on top of his wages. ‘It’s hard for me to provide for my daughters with $8.75,’ he said.”

The nonsense that we hear from the leftists—and the elitists which are one in the same—is that the situ-ation of Mr. Tarver is a result of “evil” capitalism and therefore we need a more egalitarian economic system to avoid this. When applied in the context of the Philippines, one ex-pert recently called for an “Economic Edsa” to solve this problem. Presum-ably that means going into the streets and stealing from the “rich” to give to the “poor” and then paying everyone the same “living wage.”

My generous use of quotation marks is because of the movie The

Princess Bride. The character Inigo Montoya says to the villain Vizzini, “You keep using that word. I do not think it means what you think it means” for misusing his words.

A free market system acknowl-edges the fact and the need for the business cycle in the same way the farmer knows there will be years of bountiful harvests and years of near-famine. Properly understood and taken advantage of, these cycles can be a stair step to more wealth. If a farmer—or a business owner—is cautious during the downtrend or famine, he can greatly expand his crop, business and wealth when times are good.

The business cycle provides eco-nomic mobility, both up and down, for those that are smart or foolish.

Karl Marx and those of his think-ing believe the cycle should be stopped to prevent some people going down the economic ladder during the

bad times. In order to get people to buy in to his ideas, everyone would be paid a living wage with wealth equality for all.

This is nothing more than a return to the feudal system.

The lord made sure that all the serfs had food to eat during the famine. Everyone received a living wage all the time. But when the harvest was abundant, it was only the lord of the manor that saw an increase in wealth, not the peas-ants. For most of the last decades, that has been governments and their banker friends.

When I worked in a fast-food place—about the time Edison in-vented electricity—all the line em-ployees were part-time high-school or college students. Only one of the three assistant managers was not a student, having completed two years of college and wanting some work experience. Both of the store managers, in their late 20s, were gaining their experience with the intent of owning their own McDon-ald’s franchise one day. No one ever conceived back then that flipping burgers was a full-time career for a man with two kids.

Studies have shown that upward economic mobility is still a reality in the US but not as before. Now, an American born in the bottom 20 percent of the economic wealth chain has about an 8-percent chance of ris-ing to the 20 percent at the top. The odds are twice that in Denmark. With

the massive multitrillion dollars spent in the US on the “antipoverty” program in the last 40 years, upward economic mobility has decreased.

Economic growth led by allowing the free market to flourish is the only way to end poverty, as studies over the last 40 years have repeatedly shown. But those calling for an Eco-nomic Edsa always cite China raising 50 million out of poverty. Their ar-gument is all nonsense.

Poverty in China never got better until the early 1980s, after decollec-tivization of agriculture, opening the country to foreign investment and allowing people to start businesses. China’s economy grew by 14 percent in 1993 and has averaged 9 percent since 1989. Urban Chinese citizens had virtually no increase in living standards from 1957 until Mao Ze-dong and communism died. Rural Chinese had no better living stan-dards in the 1970s than in the 1930s.

High economic growth causes poverty to go down. But also as the poor get richer, everyone else also gets richer. In other words, the best place to build personal wealth is in a “poor” country getting richer than in a rich country getting poorer.

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

OUTSIDE THE BOXJohn Mangun

NOBODY should be surprised that Toyota, flush with $18 billion in profits this year, has emerged as a major beneficiary of Abenomics. After all, the weakened yen at the center

of Japanese Prime Minister Shinzo Abe’s economic program was designed to help the bottom lines of major exporters.

Toyota leaves Japan in the dust

But it’s still something of a shock that Japanese workers won’t be shar-ing in Toyota’s good fortune. Rather than invest any of its spoils in Japan, the car manufacturer announced plans this week to spend $1.4 bil-lion to build new factories in Mexico and China.

It’s certainly good news that one of Japan’s most iconic companies is experiencing a resurgence. And Toy-ota CEO Akio Toyoda’s plans to shift production to emerging markets will surely please the company’s share-holders. Toyota is the rare example of a Japanese manufacturer that has figured out how to create operations that are truly global.

But Toyota’s move is a body blow to Tokyo’s “reshoring” push. Offi-cials had hoped the yen’s 29-per-cent plunge since late 2012 would encourage manufacturers to bring back jobs they had shifted abroad over the last decade. Just last week analysts at the financial-holding company Nomura voiced confi-dence that the yen would “enhance the relative appeal of producing in Japan.”

Toyota evidently disagrees. The company seems to have determined that Japan’s shrinking, aging popula-tion and high labor costs don’t offer sufficient room for growth. It may only be a matter of time until other

Japanese companies decide to follow Toyota’s lead.

In that sense, the strategy behind Abenomics has always been flawed. Tokyo had been betting on a cash-for-paychecks deal between the Bank of Japan (BOJ) and companies. In exchange for a weak yen, executives would be expected to fatten salaries, which would allow workers to flock to shopping centers and produce vi-brant national growth. But execu-tives haven’t been interested in the quid pro quo. Last month Toyota backhanded the BOJ by giving its 63,000 union employees a meager $33 per month pay hike.

By concentrating on foreign markets—for both sa les and manufacturing—Toyota is simply responding to where the growth is. The company is intent on maintaining its strong position in North America, where economic growth is steady and wage gains, while still subpar, outpace those in Japan. China, meanwhile, is a longer-term project. Toyota hit the 1-million mark for annual sales for the first time in 2014. Even if Chi-na expands less than the govern-ment’s 7-percent target, the rate at which incomes are rising among its

population of 1.3 billion people is far outpacing the increases that Ja-pan’s 127 million people have seen.

The only way Tokyo can woo pro-duction back to Japan is if it imple-ments pro-growth policies. The weak-yen model worked well enough for Japan in the 1970s and 1980s, but it has little relevance now that cheaper competitors have caught up as manufacturing hubs.

One option Japan should con-sider is using tax incentives to lure producers home. A key pillar of Abe-nomics has been cutting Japan’s 36-percent corporate tax rate. More good would come from slashing the rate only for executives who create jobs in Japan. Additional sweeten-ers could be offered to companies that share outsized profits with workers. Tax penalties could be imposed on CEOs who hoard excess cash they could be using to enliven domestic demand.

Unfortunately, there’s little evi-dence any of these steps are afoot. Rather, all eyes are on the BOJ, which is expected to weaken the yen even further in the months ahead. Japan’s economic wheels, it seems, will keep spinning, but only Mexico and China can count on enjoying the ride.

BLOOMBERG VIEWWilliam Pesek

Saturday, April 18, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

Message of his Holiness Pope Francis for Lent 2015

Conclusion

Make your hearts firm!

Dear brothers and sisters, how greatly I desire that all those places where the Church is present, especially our parishes and our communities, may become islands of mercy in the

midst of the sea of indifference!

3. “Make your hearts firm!” (James 5:8)—Individual Christians

aS individuals too, we have are tempted by indifference. Flooded with news reports and troubling images of human suffering, we of-ten feel our complete inability to help. What can we do to avoid being caught up in this spiral of distress and powerlessness?

First, we can pray in communion

with the Church on earth and in heaven. Let us not underestimate the power of so many voices united in prayer! The 24 hours for the Lord initiative, which I hope will be ob-served on March 13 and 14 through-out the Church, also at the diocesan level, is meant to be a sign of this need for prayer.

Second, we can help by acts of charity, reaching out to both those

near and far through the Church’s many charitable organizations. Lent is a favorable time for showing this concern for others by small yet con-crete signs of our belonging to the one human family.

Third, the suffering of others is a call to conversion, since their need reminds me of the uncertainty of my own life and my dependence on God and my brothers and sisters. If we humbly implore God’s grace and accept our own limitations, we will trust in the infinite possibili-ties which God’s love holds out to us. We will also be able to resist the diabolical temptation of thinking that by our own efforts we can save the world and ourselves.

as a way of overcoming indiffer-ence and our pretensions to self-sufficiency, I would invite everyone to live this Lent as an opportunity for engaging in what Benedict XVI called a formation of the heart (Deus Caritas Est, 31). a merciful heart does not mean a weak heart. anyone who wishes to be merciful must have a strong and steadfast heart, closed

to the tempter but open to God. a heart which lets itself be pierced by the Spirit so as to bring love along the roads that lead to our brothers and sisters. and, ultimately, a poor heart, one which realizes its own pov-erty and gives itself freely for others.

During this Lent, then, brothers and sisters, let us all ask the Lord: “Fac cor nostrum secundum cor tuum”: Make our hearts like yours (Litany of the Sacred Heart of Jesus). In this way we will receive a heart which is firm and merciful, attentive and generous, a heart which is not closed, indiffer-ent or prey to the globalization of indifference. It is my prayerful hope that this Lent will prove spiritually fruitful for each believer and every ecclesial community. I ask all of you to pray for me. May the Lord bless you and Our Lady keep you.

+ Francis

For comments, e-mail caritas_ma-nila@yahoo.com. For donations to Caritas Manila, call 563-9311. For inquiries, call 563-9308 or 563-9298. Fax: 563-9306.

SERVANT LEADERRev. Fr. Antonio Cecilio T. Pascual

DATAbASECecilio T. Arillo

Why do strangers assumemy girlfriend is my nurse?

By Shane Burcaw | The Morning Call/TNS

I reCenTLy was out on a dinner date with my lovely girlfriend anna when a stranger approached to have a friendly conversation. He turned to my girlfriend and asked, “are

you his sister?”

There is nothing inherently wrong with his question, but if I saw two young people having a nice meal together, I would probably assume they were dating. This does not seem to be the assumption people make when you throw a wheelchair into the picture.

On various other occasions my girlfriend has been asked if she was my nurse. Once, a person asked if she was “the one who takes care of him.” We’ve gotten used to this bizarre, recurring question, and often find ways to poke fun at the ignorance of strangers.

“He’s my dad,” anna will some-t imes answer w ith deadpan perfection.

“I just pay her to be my friend,” I will often reply.

The mind-set that causes a stranger to automatically assume that any female in my presence is a nurse, or family member, ignores the reality that people with disabilities can and do have “normal” romantic relationships. I place normal in quo-tations because I’m not sure if there is such a thing when it comes to love.

For a good chunk of my young life (I’m 22 and I have a disease called spinal muscular atrophy, similar to Lou Gehrig’s disease), I didn’t think I was worthy of that type of affection. I worried that my physical limitations would prevent girls from wanting to date me. I will not be able to pick her up in my car, I can’t give hugs or hold hands very well, and we will be limited in the activities we can do for dates. It all seemed rather hopeless in the heart-wrenching, hormone-fueled days of middle school.

I worried even more that a girl would date me out of pity, silently putting up with the annoyances of my disease because she felt bad for me. Then college came and my brain opened up to the real truth. I met some spectacular people who helped me shake the notion that love was only for the physically abled.

Sure, I can’t hold anna’s hand in the traditional sense, but we make it work. To be fair, our fingers look like a catastrophic train wreck once they are intertwined in the precise position that I can manage. I can’t pick her up in my car, but so what? She enjoys driving and so we make

it work. and no, I can’t go mountain climbing with her, but I can make her laugh. So we find other activi-ties. We make it work. I’ll leave the most intimate details for my books.

Once I realized that there are girls out there who are more than happy to “make it work,” the fear of being unloved for all eternity drifted away like a funny joke of the past.

Today, I live with the firm belief that a relationship between an able and disabled couple can be even more satisfying than your average romance. I’m still young and some-times stupid, so I don’t want to trick you into thinking I have this all fig-ured out. But I believe the deeper closeness in an able/disabled rela-tionship blossoms from the process of teaching your partner how to “care” for you. That’s a tough con-cept to grasp, so I’ll try to provide an example.

The first day that anna and I spent together, we decided to go out for brunch. This outing required anna to learn “Shane Helper Les-sons,” such as putting on my jacket, driving my van, picking up my head when I lost my balance, cutting my food and helping me take sips of my drink. at this point in our relation-ship, I hardly knew anna, and was afraid all of this “helping stuff” would overwhelm her. I must have expressed this because I vividly re-member a conversation where she said she was excited by the prospect of learning how to help me.

There is something profoundly intimate about a statement like that. On my end, I felt a deep sense of se-renity that could only be attributed to trusting her with my care. On her end, and I’ve checked with her, there was an important emotional con-nection that began to develop when she chose to be with me despite the extra requirements of stepping in to do such things as cut my meatloaf.

In fact, one of our main sources of bonding was teaching her how to keep me alive—like how to brush my teeth without choking me, how to put my shoes on correctly or how to shave my face without slicing my jugular.

We never think twice about the fact that our relationship is abnor-mal in any way.

We simply make it work.

Part 3

International arbitration

One way to achieve a satisfactory result is for the parties to agree to submit any future disputes between them to a neutral decision maker. This, in fact, is what is done in

the vast majority of international transactions. It takes the form of international commercial arbitration.

Dealing with difficult people and difficult situations

arbitration, an age-old method of solving disputes, is found in most of the world’s cultures. While it has many variations, basically it is a pro-cess whereby two people agree to submit a present or future dispute to a third person and further agree that they will carry out the third person’s decisions.

arbitration is of two types: in-stitutional and ad hoc. In institu-tional arbitration, the parties select a specific institution to administer their arbitration proceeding. Many institutions exist around the world to handle arbitration. The best known include the International Chamber of Commerce, the ameri-can arbitration association, the London Court of arbitration, the Stockholm Chamber of Commerce, and the Zurich Chamber of Com-merce. each has its own rules and procedures.

In an ad hoc arbitration, the par-ties administer the arbitration them-selves according to rules they have agreed upon.

Rejection and renegotiationWHen one side feels that it is tied to a contract that has become unfair or unreasonable on account of changed circumstances, it usually attempts at renegotiation before outright re-jection. attempts have been seen to redo many existing deals.

Third World borrowers have been engaged in a constant process of rene-gotiating loans when they have been unable to repay, an exercise com-monly known as debt rescheduling.

The dramatic fall in the price of oil and gas from the heights of the early 1980s and 1990s forced purchasers in that decade to try to renegotiate long-term supply agreements that once seemed profitable but had be-come ruinous.

Three types of renegotiationTO handle the problem, negotiators must understand precisely the kind of renegotiation that they are fac-ing. The term “renegotiation” covers three fundamentally different situ-ations, and it is important to dis-tinguish each of them at the outset. each raises different problems and demands different solutions. The

situations are (1) post-deal renego-tiation, (2) intra-deal renegotiation, and (3) extra-deal renegotiations.

n Post-deal renegotiations. In this situation, negotiations take place at the expiration of a contract, when the two sides, though, legally free to go their own ways, nonethe-less try to renew their relationship. Here the renegotiation process may be very much like the negotiation of their original deal, but there are also some notable differences.

The willingness of the partici-pants to reach agreement is influ-enced by their tangible and intan-gible investments in their first re-lationship and the extent to which those investments may be used advantageously in their second contract. The foreign distributor will have trained its employees and organized itself to handle the US manufacturer’s products.

In general, the success of post-deal renegotiations depends on the strength of the relationship built by the two sides during the original con-tract. If that relationship is strong, the atmosphere at the table will be one of two partners trying to solve a problem. If the relationship is weak, the prevailing mood will be that of two cautious adversaries who know each other only too well.

n Intra-deal renegotiations. a second type of renegotiation occurs when an agreement provides that, during its life at specified times, the two sides may renegotiate or at least review certain provisions. Here, re-negotiation is anticipated as a legiti-mate activity in which both parties are to engage in good faith.

In a long-term supply contract, the two sides may agree to meet pe-riodically to determine raw material prices. rather than leave the matter entirely open to bargaining by the parties, the contract may put limits on renegotiation by specifying a for-mula or criteria to be used in setting new terms. In this case, the renego-tiation will focus on the interpreta-tion and application of the formula.

n Extra-deal renegotiation. The most difficult and emotional re-negotiations are those undertaken in apparent violation of an agreement, or at least in the absence of a specific

clause for redoing the deal. These re-negotiations take place “extra-deal,” for they occur outside the framework of the existing agreement.

Beyond mere disillusionment, extra-deal renegotiations, by their very nature, can create bad feeling and mistrust. One side believes it is being asked to give up something to which it has a legal and moral right.

Justifying extra-deal renegotiationsreSpeCT for agreements is a basic norm in virtually every culture. How, then, can attempt to renegotiate a valid contract be anything more than an unprincipled power play? after all, a deal is a deal, isn’t it?

respect for agreements is, in-deed, the rule in virtually all soci-eties. It may even rise to the level of a universal principle of law. But in exceptional circumstances most cultures also provide relief, in vary-ing degrees, from the binding force of a contract. “a deal is a deal” cer-tainly expresses a fundamental rule of human relations, but so does the statement: “Things have changed.”

A deal is not foreverWHILe praising the sanctity of con-tract, every experienced negotiator knows that no deal is forever. accord-ingly, before you arrive at the nego-tiating table, calculate the risks of change in any eventual deal and take account of them in developing your negotiating plans and strategies.

Throughout the negotiations, remember the following principles: when the costs to the other side of rejecting a deal are less than respect-ing it, the risk of repudiation and renegotiation increases. your basic strategy to give stability to your deal is to assure that the other side derives sufficient benefits from keeping the agreement or incurs sufficient costs from breaking it.

To apply this strategy for a stable agreement, a negotiator should re-member the following steps:

Step 1: embody the deal in a carefully written agreement with detailed provisions and guarantees to ensure regard for the contract to the maximum extent possible. This means that you should try to anticipate possible changes in cir-cumstances and provide them in the

contract. at the same time, you should calculate the realistic pos-sibility of extra-deal renegotia-tions and include that calculation in your plans.

Consequently, prices, rate of re-turn and other essential terms should reflect a hard-headed assessment of the actual duration of the initial agree-ment, rather than the duration stated on the contract document.

The other side should fully un-derstand the contract, particularly its inherent risks. If you try to hide those risks, you inevitably open yourself to charges of bad faith and demands for renegotiation later on.

The agreement itself should iden-tify those risks and clearly allocate them to one or both sides. Interna-tional contracts often include a force majeure clause, a provision that sus-pends or excuses performance of specified contractual obligations on the occurrence of stated events like war, strikes or civil unrest.

a wise negotiator should build into an agreement mechanism to reduce the likelihood of rejection and renegotiation. The thrust of these mechanisms is either to raise the cost to the other side for not re-specting the deal or, alternatively, compensate the side that has lost the benefit of the deal it made. Two common mechanisms are a perfor-mance bond and linkage.

Step 2: Create a balanced agree-ment. If the agreement is mutually beneficial, both sides have an incen-tive to maintain it. neither side will consider rejection or repudiation as an attractive alternative.

a balanced agreement might be one that allocates specific risks in a venture to the party best able to bear that risk, rather than merely on the basis of raw bargaining power. It might also provide that unexpected windfalls or losses be shared by both parties, rather accrue to one side or the other.

Step 3: provide specifically in the agreement intra-deal renegotiations at defined intervals on specific issues that are particularly susceptible to changing circumstances. a variation of this approach is to provide for a series of linked short-term contracts that together will extend over the life of the contemplated business relationship. each of the specific agreements will be renegotiated as the relationship evolves.

rather than dismiss the possi-bility of renegotiation and then be forced to consider review of the entire contract at a later time, it is better to recognize the possibility of renego-tiation at the outset and set down a clear framework with which to con-duct the process. In short, recognize the possibility of redoing the deal, but control the process.

To be continued

To reach the writer, e-mail cecilio.arillo@gmail.com.

By Darryl Lorenzo Wellington

Tribune News Service

THe unjustified shooting in South Carolina yet again demonstrates the necessity of police reform.

We only know the truth about the en-counter between Officer Michael Slager and Walter Scott in north Charleston, South Carolina, because of a video by an unseen bystander. The video reveals that Slager lied in his initial recounting of the shooting and that he tampered with evidence.

Obviously, this is not an isolated event. The Slager video has been pre-ceded by other recent shocking footage, including documentation of the shoot-ing of mentally ill camper James Boyd in new Mexico, the strangulation of eric Garner in new york and the killing of 12-year-old Tamir rice in Cleveland. Blacks and Hispanics are far more likely to be wrongful victims.

Over the past 10 years, the Justice Department has conducted numerous investigations of police municipalities, documenting a pattern of transgressions nationwide. The reports make recom-mendations such as the additional use of surveillance cameras, mandatory sup-plemental police training and the estab-lishment of independent review boards with real decision-making powers.

But often recommendations that take away authority from police chiefs and district attorneys areruthlessly re-sisted, and police departments refuse to relinquish internal control. Too often, Justice Department proposals are ne-gotiated down to mere words.

In response to the controversial deaths of Garner and of Michael Brown in Ferguson, Missouri, president Barack Obama suggested fitting police officers throughout the country with body cam-eras and requiring all police departments to undergo racial sensitivity training, yet both ideas were rejected by his own police reform task force. The panel did recom-mend that every case involving police fa-tally shooting civilians should be handled by independent prosecutors who have no bias toward protecting the local force.

But this admirable “recommenda-tion” remains that, only that. It will not become a rule-of-thumb for police forces across the nation until and unless poli-ticians, leaders and activists push for it and the public rises up to demand it.

Transforming the police ultimately means enabling independent oversight. It’s time to establish independent pros-ecutors—and more. It’s time to give com-munity-led review boards the powers to hire and fire officers, establish policies and recommend sanctions. These ideas are neither unrealistic nor unachievable.

We need to initiate comprehensive police reform right now.

Comprehensive police reform needed after Carolina shooting

In general, the success of post-deal renegotiations depends on the strength of the relationship built by the two sides during the original contract. If that relationship is strong, the atmosphere at the table will be one of two partners trying to solve a problem. If the relationship is weak, the prevailing mood will be that of two cautious adversaries who know each other only too well.

WASHINGTON—Finance officials from the world’s major economies are

searching for the right mix of poli-cies to bolster a still-weak global re-covery nearly six years after the Great Recession, while confronting a range of new threats from a soaring US dol-lar to a big drop in oil prices. The financial officials from the Group of 20 (G-20) nations were also expressing concerns about po-tential market instability once the Federal Reserve (the Fed) starts in-creasing a key interest rate, which has been at a record low near zero since late 2008. The discussions were being held among finance ministers and central bank presidents of the G-20, composed of traditional economic powers, such

as the United States, Japan and Ger-many, and emerging countries, such as China, India and Brazil. Treasury Secretary Jacob Lew and Fed Chairman Janet Yellen were representing the US at the meetings, which began with a dinner on Thurs-day night and were to conclude with a news conference on Friday afternoon. Deputy Prime Minister Ali Babacan of Turkey will sum up the group’s discus-sions. Turkey holds the rotating chair-manship of the G-20 this year. The G-20 talks were coming in ad-vance of the spring meetings of the 188-nation International Monetary Fund (IMF) and its sister lending or-ganization, the World Bank. In addition to concerns about boosting global growth, the finance meetings were also addressing issues,

including a plea for more help in fight-ing the Ebola outbreak in the West African nations of Liberia, Guinea and Sierra Leone. The presidents of those three nations were scheduled to meet on Friday with World Bank President Jim Yong Kim and UN Secretary-General Ban Ki-moon. The finance meetings were tak-ing place at a time when much of the global economy remains stuck in a prolonged period of sluggish growth following the 2008 financial crisis and a recession that was the worst in seven decades. IMF Managing Director Chris-tine Lagarde told reporters on Thursday: “The good news is that the global recovery continues. The not-so-good news is that growth

was the seventh-most affected by natural disasters between 1993 and 2012, according to its Global Climate Risk Index 2014. Typhoon Pablo (international code

name Bopha) did more than $800 million of damage in December 2012 and last year Typhoon Glenda (inter-national code name Rammasun) cost

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phSaturday, April 18, 2015

See “Group of 20,” A2

See “Catastrophe,” A2

BOI eyes release of ‘inclusive business’ guidelines in Q3

Finance officials from Group of 20 economies confront global weakness

Philippine peso heads for best week since January on remittances THE Philippine peso headed

for its biggest weekly advance since January, after data

showed an increase in the amount of money sent home by workers living abroad. Remittances, which accounted for 9 percent of gross domestic prod-uct in 2014, climbed 4.2 percent in February from a year earlier, the central bank reported on Wednes-day. That compared with a 0.5-per-cent increase in January. The peso rose, even as foreign funds pulled $103 million from local shares in the first four days of the week, exchange data show. “You’ve seen a rebound in remittances,” said Joey Cuyegkeng, an economist at ING Groep NV in Manila. “There were foreign sellers in the stock market. Apparently, those investors were taking profits without going out from the Philippine market.” The peso gained 0.4 percent since April 10 and 0.2 percent on Friday

to 44.355 a dollar as of 11:21 a.m. in Manila, prices from Bankers As-sociation of the Philippines show. That’s the biggest gain since the five-day period ended January 23, and takes the currency’s advance this year to 0.8 percent. The central bank announced this week details of a new deposit facility for banks, part of its efforts to curb liquidity and influence market inter-est rates more effectively. Banks will have to compete in weekly auctions for a fixed volume of term deposits, with tenors ranging from one month to one year, Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said April 13. The yield on the benchmark 10-year bonds fell four basis points, or 0.04 percentage point, to 4.12 percent this week through Thursday, accord-ing to an end-of-day fixing from Phil-ippine Dealing & Exchange Corp.

Bloomberg News

REMEMBERING ELPIDIO QUIRINO Bernard Kerblat (from left), Philippine representative, United Nations High Commissioner for Refugees; Israeli Ambassador Ephraim Ben Matiyau; and Cory Quirino, trustee, President Elpidio Quirino Foundation, sign the Quirino, Pilipino dedication wall to launch “Ako, Pilipino!”, an advocacy campaign which aims to reacquaint the country with Elpidio Quirino, the country’s sixth president, whose life was guided by the principles of tolerance, goodwill and love. Coinciding with his 125th birth anniversary, the campaign aims to introduce Elpidio Quirino to the younger generation, to remember him and to reassess his relevance today. NONIE REYES

By Catherine N. Pillas

The Board of Investments (BOI) said on Friday it is targeting to roll out the guidelines for a govern-

ment-led initiative by the third quarter of this year to hasten the registration of proj-ects which could provide jobs to the poor. Trade Undersecretary and BOI Managing Head Adrian S. Cristobal Jr. said the government’s Inclusive Business (IB) model’s accreditation process is gaining headway. The IB model is a BOI-led initia-tive aimed at encouraging enter-prises in agribusiness, tourism and

housing sectors to create projects that would create jobs in rural areas. The IB model is already included in the 2014 Investment Priorities Plan’s general policy framework.  Cristobal said the guidelines will spell out the parameters and accredi-tation process for firms in the three

sectors, and will prioritize the job- creation aspect of the projects.  According to a policy paper made in consultation with the De-partment of Trade and Industry (DTI), preferential treatment will be given to firms that will qualify. Companies may be offered a pack-age consisting of fiscal and non-fiscal incentives.  The Asian Devel-opment Bank (ADB) has partnered with the DTI on the initiative, and has extended a loan of $250 million to support the program. Documents showed that the DTI was tasked to handle the amount. The BOI said it has identified three agribusiness projects of Nestlé Philippines, Kennemer Foods Inc., and Rocky Mountain Arabica Cof-fee Co. (RMACC) as likely candidates for the program, citing the impact of

their operations on job generation and the economy of the communi-ties they serve. The local unit of Swiss conglom-erate Nestlé has been helping cof-fee farmers in different parts of the country by teaching them how to improve their crops. KFI helps cacao growers, espe-cially beneficiaries of the govern-ment’s Comprehensive Agrarian Reform Program in Mindanao, via a contract-growing arrangement with them. RMACC, which produces coffee for institutional customers and su-permarkets, works with local indig-enous peoples. Upon completion of the accredi-tation process, the BOI said it is targeting at least 20 IB projects per sector to serve as “pilot class.”

since November 2014.  Combined, Northwind and North Luzon Renewables put Ay-ala’s total wind-power capacity at 133 MW, or some of the most ex-tensive in the country today.

“The completion of the projects is timely, given the anticipated tight-ness in power supply this year. We hope to further expand our renewable-energy [RE] portfolio, and help increase the share of re-

newables in the country’s energy mix,” AC Energy President Eric Francia said. Since 2011, Ayala committed over $700 million in equity to develop conventional and RE facilities. AC Energy has,

thus far, assembled some 700 MW in so-called attributable capac-ity, putting the company closer to achieving its goal of assembling over 1,000 MW of attributable ca-pacity by 2016. 

All systems go for Ayala wind farms. . . Continued from A1Catastrophe. . . Continued from A1