THE House of Representa-tives on Wednesday approved on second reading the mea-

sure renewing the franchise of Aliw Broadcasting Corp. Deputy Speaker Joseph H. Dura-no of Cebu City said legislators unan-imously approved House Bill 5391 of Majority Leader and Liberal Par-ty (LP) Rep. Neptali M. Gonzales II of Mandaluyong City.  The measure was sponsored by House Deputy Minority Leader and Party-list Rep. Silvestre H. Bello III of 1-BAP at the Committee on Legislative Franchises, headed by LP Rep. Marcelino R. Teodoro of Marikina City and at the plenary by Gonzales. 

Gonzales said Aliw Broadcast-ing, “through the years, dedicated and committed itself to efficient and effective public service by way of timely, accurate and useful dissemination of information to Filipino listeners.” According to Gonzales, the an-nual reports submitted by Aliw Broadcasting show its   finan-cial capability for continuous operations and possible expan-sion for another 25 years, saying, “Since its original franchise is expiring in 2017, another legis-lative authorization to continue its public service and operation is indispensable.”

The mother agencies of the BOI and the BIR—the Deparment of Trade and Industry (DTI) and the Department of Finance (DOF), respectively—appeared to have mended their differences on Timta when they submitted on Tuesday their joint version of the proposed incentives measure.

The joint DTI-DOF draft bill was adopted by the committee. But the

debate—it appears—is not over yet. House Ways and Means Com-mittee Chairman Rep. Romero S. Quimbo of Marikina City said he is considering the possibility of remov-ing the power of the BOI to validate incentive claims of its registered companies, leaving the processing of application for incentives entirely in the hands of the BIR.

www.businessmirror.com.ph n�TfridayNovember 18, 2014 Vol. 10 No. 40 P. | | 7 DAYS A WEEKn�Thursday, May 21, 2015 Vol. 10 No. 224

A broader look at today’s businessBusinessMirrorBusinessMirrorTHREETIME

ROTARY CLUB OF MANILA JOURNALISM AWARDEE2006, 2010, 2012U.N. MEDIA AWARD 2008

ROTARY CLUB

JOURNALISM

C A

S “A B,” A

PESO EXCHANGE RATES n US 44.5270 n JAPAN 0.3689 n UK 69.0836 n HK 5.7443 n CHINA 7.1741 n SINGAPORE 33.3536 n AUSTRALIA 35.2243 n EU 49.6476 n SAUDI ARABIA 11.8739 Source: BSP (20 May 2015)

SOCIAL NETWORK NEW FRONTIERIN PHL INSIDERTRADING BATTLETHE Philippines will start formally

monitoring social networks, like Facebook Inc. and Twitter Inc., as

the nation’s securities regulator cracks down on stock-market manipulation and Ponzi schemes. The Securities and Exchange Commission is collecting evidence to prepare a case against one company for insider trading, Commissioner Ephyro Luis Amatong, 42, said in a May 18 interview, without naming the firm. The regulator will monitor tweets and Facebook chat groups for signs of price manipulation and is “actively pursuing” other cases, he said, declining to say whether they

are primarily investigating company insiders or brokers. “The pump-and-dump, insider trading, scams: We are told they’re happening online,” Amatong said. “We’re actively pursuing cases, to pro-tect the integrity of the market.” The value of the Philippine stock market has grown threefold, to $278 billion, in the past five years, as the country’s fastest economic growth since the 1950s lures foreign funds and retail investors. While the bench-mark equity index has soared more than 140 percent in that period, surging share prices are not always accompanied by disclosure of infor-

mation, and there have been cases of financial results being divulged to analysts before they appeared on the bourse’s web site. Facebook and Twitter didn’t re-spond to e-mails from Bloomberg seeking comment on insider-trad-ing investigations. Amatong didn’t specify whether either social network had been used for wrongful activities. “There’s a lot of chatter online on what stocks to buy and you wonder sometimes: How did these people get this information?” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila.

Bloomberg News

New Timta point of contention risesD.O.F., D.T.I. DEBATE RAGES ON AS HOUSE PANEL APPROVES CONTROVERSIAL INCENTIVES BILL

Aliw Broadcasting franchise renewal nears House nod

INSIDE

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Life � ursday, May 21, 2015

Life BusinessMirror

Life Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

JJ ESUS still remains “the Senior Good Shepherd” of all ESUS still remains “the Senior Good Shepherd” of all ESUS still remains “the Senior Good Shepherd” of all human beings, but He also wants to share His mission human beings, but He also wants to share His mission with many “junior good shepherds,” chosen fromamong His own flock, to be the visible signs and

instruments of His selfless shepherding care. It is our duty to instruments of His selfless shepherding care. It is our duty to accept these junior shepherds with faith, love and gratitude. accept these junior shepherds with faith, love and gratitude. We should also support them and pray that many more may We should also support them and pray that many more may respond with generous faithfulness to the call of Jesus. In that respond with generous faithfulness to the call of Jesus. In that way, the Church of God will constantly enjoy the care of loving way, the Church of God will constantly enjoy the care of loving junior shepherds. Amen!

Loving ‘ junior shepherds’

EXPLOPING GOD’S WORD, FR. SA, PUTZU, SDB AND LOUIE M. LACSONEXPLOPING GOD’S WORD, FR. SA, PUTZU, SDB AND LOUIE M. LACSONWord&Life Publications • teacherlouie1965@yahoo.comteacherlouie1965@yahoo.com

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Going from extremeto serene in Sabang

B B L

DURING our three-day media tour at the 95-room, eco-friendly Sheridan Beach Resort & Spa, the only luxury resort in the Sabang area on the west coast of Palawan, we engaged in a number of

resort-sponsored activities that are offered to guests. Being located just a stone’s throw away from Sabang Port, the gateway to world-renowned Puerto Princesa Underground River (PPUR), it was only fitting that, on our first day, this New Seven Wonder of the World and longest navigable subterranean river in the world be the first in our itinerary.

From the port, we waited our turn to board an outrigger boat for the 20-minute ride to a beach on the far side of the bay. Along the way, we passed many beautiful limestone cliffs. Upon arrival at the beach, we then made a short hike, under huge shady indigenous trees, to the edge of a picturesque clear, turquoise blue lagoon framed by ancient trees growing right to the water’s edge. Here, we boarded small eight-seater outriggers boats that would transport us into the cave.

The river is navigable up to about 4.3 kilometers (a little over half its length), but a typical 45-minute river cruise covers only 1.5 km of the navigable stretch. As we paddled deeper into the darkness, we reached, at the 0.6-km mark, the vaulted 60-feet-high “Cathedral,” the underground river’s first main attraction. The stalactites and stalagmites inside are associated with so many things and a number were aptly named the “Holy Family” (a group of figures like a Nativity scene), the “Angel,” the “Virgin Mary” and the “Candle.” Further on, we passed the “fruit and vegetable” section, with stalagmites on the walls that look like giant mushrooms, garlic, an upside-down corn, a clump of cacao beans, carrots and pumpkins. At the 1-km mark is a marvelous, 400-meter long and straight gallery, called “God’s Highway.” Upon reaching a breathtakingly high

dome with a 65-meter (213-feet) vertical clearance (the cave’s highest point) above river level, our boat

turned around.  The next day, we were in for a whole

day of activities. After breakfast, we were driven to a beach along the

7,200-hectare Ulugan Bay, where we boarded a boat for the elongated, 25-hectare Isla Rita, a popular dive site where we had merienda and did some snorkeling. Back on shore, we proceeded to the resort’s signature, 70-hectare organic farm which supplies 80 percent of the fresh produce, as well as the black rice served at the resort’s beachfront South Sea Restaurant. After our farm tour, we had a boodle lunch at the gazebo.

After freshening up back at the resort, we again assembled at the beachfront and rode one of the resort’s two Xibeihu Amphibious Motorboats (the resort also has a number of all-terrain vehicles) which took us, on a bumpy ride through Sabang’s resorts, all the way to the mouth of the Sabang River. Here, we boarded a bamboo raft that would take us to the river’s other bank. A 15-minute hike along a beautiful, thickly forested and clean white sand beach and a short uphill trek through a forest brought us to the SabangX zipline platform tower. From the top of this headland located 150 feet above sea level, we zipped the 800-meter distance (one of the longest in the Philippines) to an island on the other end. The gentle, one minute and a half ride gave me enough time to enjoy the spectacular, 360 degree view of the pristine blue waters of the West Philippine Sea, mountains and the whole of Sabang Beach.

It was late in the afternoon when we returned to the mouth of the 4-km long Sabang River for our final activity—the educational Mangrove Paddle Boat Tour. Nestor Elijan, our tour guide, plus a paddler accompanied us on our 45-minute tour. As our boatman started paddling through the brackish but serene river water, Mang Nestor explained the importance of these century-old mangroves as breeding ground to pelagic fishes, habitats to a collection of mammals, reptiles and amphibians; as a buffer zone between the land and the sea, as protection of the coast against erosion; as a filter against bad elements of the land; and as a protection for coral reefs and seagrass beds from being covered by the debris which block sunlight from reaching them. Along the way, we had a number of close encounters with 6-feet to 8-feet long, elegant but mildly venomous Mangrove Cat Snakes sleeping among the overhanging branches, a long-tailed macaque, a monitor lizard and mangrove egrets. On our way back, our paddler alighted among

the mangroves to look for some driftwood bored by tamilok, shipworms that are considered a pest in other countries but are a delicacy in these parts. When dipped fresh in coconut vinegar, they are said to taste like oysters. The mangrove tour capped a truly fulfilling and adrenalin-filled day. n

WANDERERS who refer their friendsto Citigold (www.citibank.com.ph), the www.citibank.com.ph), the www.citibank.com.phleading wealth management partner inAsia, will be rewarded with a Rimowa Salsa Cabin Multiwheel.

Under its Member-Get-Member program, members would only have to earn a total of four points, wherein one point is equivalent

to one referral, to travel in style with one of Europe’s leading and most fashionable luggage brands.

You can refer more to get grander rewards like the Rimowa Classic Flight Multiwheel 70cm, iPhone 6 16GB, iPad Air 2 or iPad mini 3 for five successful referrals. How’s that for a travel incentive?

BORACAY’S FIRST ALL-SUITE SERVICED APARTMENTSSLATED to open mid of 2015, Azalea Boracay (www.azalea.com.ph) is the island’s very first four-star quality serviced com.ph) is the island’s very first four-star quality serviced com.phapartments thoughtfully designed to provide value-for-money accommodations for large groups of families and friends. A preopening sale of accommodations is ongoing until June 30.

Featuring spacious one-, two- and three-bedroom units complete with full kitchen amenities, separate dining and living areas with suites ranging from 30 square meters to 75 sq m, families or group of friends wanting to be together in one spacious accommodation is now a possibility. Aside from sizable rooms, it’s also equipped with a kitchen facility complete with cooktop range, microwave, refrigerator, rice cooker, electric water kettle, cookware and dinnerware all provided free of charge.

As traveling in large groups usually call for space, functionality, and practicality, all suites are conveniently configured for multiple persons. By staying in Azalea, vacationers can save by getting one unit to accommodate everyone instead of booking multiple hotel rooms. The larger the group gets, the further the savings on hotel rooms. From the smallest suites to the biggest accommodations, guest can expect generous sitting areas with a convertible sofa bed and baby cots for the little ones upon request. Moreover, Azalea Boracay’s entertainment facilities, such as multiple LCD TV with cable channels in the rooms make for the perfect companion for those moments a TV series or movie marathon win over soaking up the sun. Also, free Wi-Fi is readily available in all rooms and public areas for real-time uploads of those vacation photos.

With its full kitchen facility, vacationing guests may do simple cooking, re-heat food or load up on snacks, drinks and even ice cream or coolers in the freezers for midnight snacking, the perfect companion for the all-night cozy chat.

Nearing completion, Azalea will feature 285 guest rooms, a restaurant and a pool bar, and is the second hotel development under the Azalea group, the first being in Baguio. Future proposed sites include Cebu, Davao and Angeles City.

A freebie for the wanderer

A ONE-BEDROOM suite in Azalea Boracay

THE coral reef of Isla Rita

PagesBusinessMirror www.businessmirror.com.phD4 �ursday, May 21, 2015

CHEF Sau del Rosario

B M D’A P

IT was as if the kitchen gods—and goddesses—descended on Earth as the culinary luminaries of the country gathered to celebrate the launching of Chef Sau del Rosario’s book, titled 20 Years of Love+Cooking, held recently at 20 Years of Love+Cooking, held recently at 20 Years of Love+Cooking

Epicurious in Shangri-La Plaza.The book, which he says is a labor of love, pays

tribute to his friends and icons who have all helped him on his journey. It starts off with a retelling of his story. It is the one about a boy who dared to dream big, and whose kitchen fires propelled him toward pursuing what seemed to be an impossible dream to study the culinary arts in Paris.

In a previous interview, he recalled the cold, the hardships and the heartaches of being away from his home country, and most especially from his beloved mother. It was she who pushed him to succeed, and with the support of friends, he was able to return, armed with the expertise that helped him to establish a name in the industry. While his training centered on French and Asian fusion cuisine, his heart never left home, as he set about shining a spotlight on heirloom Pampanga delicacies, the same food that he grew up with. There are recipes shared for those who want to cook Filipino food in the traditional way.

The book also features testimonies by the very people who have worked and grown with him in the industry: family (and extended family), friends, colleagues, celebrities and personalities, and international and local chefs alike. It is described as a passion project, one that shows and tells of both the undeniable talent and heartwarming humility of a man who has literally been through it all.

The night was filled with fun and laughter as his friends narrated their accounts and anecdotes on how Chef Sau has touched their lives.

PR expert Junie del Mundo, Enderun Culinary Head Chef Cheong Yan See, food journalist Edith Singian, and publicist Gwen Carino, were among those who gave their respective congratulatory messages to Chef Sau. AKME Publishing Group Corp. President Kim Cuizon thanked the chef as well, saying, “Any publisher dreams of having books in its roster and to have yours as our first gives us so much joy.”

As Chef Sau took the stage to acknowledge those who were present that night, he gave a brief explanation of the book cover, one which pictured him gleefully

frolicking in a bathtub. “It is symbolic, as I see myself as the base from which broth is made,” he smiles.

Chef Sau’s 20 book is on a nationwide book tour and 20 book is on a nationwide book tour and 20book signing, which is ongoing until October. Cooking demos in promotion of the book will also be held in Metro Manila’s major food expos in the coming months,

as well as in culinary schools and residential villages in the city.

n 20 Years of Love+Cooking is available in all National 20 Years of Love+Cooking is available in all National 20 Years of Love+CookingBook Store and Fully Booked outlets in Metro Manila, and is available online for P1,200 at breakfastmag.com.

THE National Book Development Board (NBDB) and the Manila Critics Circle (MCC) are calling upon all NBDB-registered publishers to submit their nominations for the National Book Awards (NBA) 2015. The deadline of submission of entries is on May 30. Books mailed from outside Manila will be accepted if postmarked on May 30.

This year, Language Studies, a special category, is the latest addition in the NBA Guidelines. As the revised rules state, “Language Studies includes dictionaries, grammars, and essays on translation, linguistics, and other language-related areas. This special category is given by Komisyon sa Wikang Filipino [KWF]. The KWF is responsible for the screening process and determination of winner and awarding of the prize for the winner.”

Also, in the Literary Division, the categories are open to books in any language (published in the last calendar year), but there are special categories this year for books in Hiligaynon and Kinaray-a (published within the last three calendar years: 2012 to 2014).

As announced earlier, initial changes in the NBA 2015 rules are the addition of the Essays Category in the Literary Division and the splitting of History and Journalism into two separate categories in the Non-Literary Division. Translation, a new category added last year, covers “a book translated from one language into a Philippine language, English, or Spanish; or from one Philippine language to another Philippine language.”

To view/download a copy of the final version of the NBA 2015 rules, visit www.nbdb.gov.ph or www.nbdb.gov.ph or www.nbdb.gov.ph tinyurl.com/lm3eeqa.

B C K Los Angeles Times

ABOUT 50 pages into A God in Ruins, I got confused. As the book picked up momentum, it was throwing Teddy Todd, a World War II pilot, 40 years ahead to a full life of parenthood and grandparenthood. But hadn’t Teddy died during the war in Kate Atkinson’s last novel, Life After Life?

Indeed he did. But he also did not. Life After Life, a charming and innovative 2013 bestseller, told the story of Ursula Todd, a Greatest Generation Brit who expired Ursula Todd, a Greatest Generation Brit who expired Uagain and again (and again and again), each time being reborn into the same life where she just might, with the right combination of luck and pluck, get a chance to take a shot at Hitler.

Teddy was Ursula’s younger brother, and his death, Ursula’s younger brother, and his death, Ucoming near the end of the book, was heartbreaking. He was the perfect little brother, precocious and curious and sweet, and Atkinson seems not quite able to let him go. In a later thread in that book, she allowed him to survive his fiery plane crash, and he is at the center of A God in Ruins, which she calls not a sequel to the previous book but its companion.

You don’t have to read Life After Life to get A God in Ruins, and sadly, the new book doesn’t live up to the promise of its predecessor. The first novel’s innovative structure made it exciting, but its true charm was in the rich family life drawn by Atkinson (with no shortage of morbid wit), counterbalanced by harrowing scenes of London during the Blitz. Readers fell for Ursula and Teddy and the rest of their siblings; their glamorous, kooky aunt; their parents and neighbors; for Ursula’s Ursula’s Ulovers and friends.

Teddy is surrounded by far less appealing characters in A God in Ruins, particularly in the first half of the book. That’s when we’re mostly learning about late-life Teddy, an aging grandparent whose past emerges in memory and reverie. “The dead were legion and remembrance was a kind of duty, he supposed. Not always related to love.”

After the war, Teddy wed his childhood sweetheart, but the marriage, which appeared solid, lacked passion. It’s one of the many disappointments he suffers (silently, stoically). He winds up raising their daughter, Viola, on his own; she is unpleasant as a child and a singularly selfish adult. When not neglecting her children, Viola

is openly hostile to them. Sunny, her son, is a chronic failure; miraculously, her daughter, Bertie, grows up all right. The attentive, kind relationship between Bertie and her grandfather Teddy provides the book with much-needed warmth.

In the first half of the book, Teddy’s life is diminished—geographically, from a country house to an anodyne duplex in York to a grim assisted-living facility; technologically, from flying warplanes to being unable to figure out how to use a cell phone; socially, having lost his intimates, siblings, lovers and friends. Although Teddy keeps a stiff upper lip as his generation was bred to, it is a desolate state of being and not much fun in terms of a fiction to live in.

The book’s backward arc moves from Teddy’s late life to his youth in the Royal Air Force. This structure isn’t surprising, as Life After Life’s was, but Atkinson seems to have carefully tended to it so that the most meaningful details are withheld for much of the text; we often encounter fragments whose significance doesn’t emerge until very late in the story.

In one instance, as Teddy’s grandson is helping to pack his grandfather up to move to an assisted-living facility, Sunny discovers a box of medals from the war. It will be hundreds of pages before we learn what Teddy had done to earn those medals and what they mean to him. This might seem a juicy tease, but, lacking context, it winds up draining the narrative of feeling.

The blankness of the early chapters may be a deliberate exercise in a novel exploring the erasure of time. “No one now but Teddy would ever know that once he and Nancy had huddled by the great Aga in the kitchen while the wind blew up the hill and the whistled through every room, competing with Beniamino Gigli and Maria Caniglia singing Tosca on their cherished gramophone...” he thinks sadly. “It would all die with him, he realized....”

All the emotion of the novel has pooled at the end, where the significant moments of Teddy’s life tumble out in a cascade: We see the end of his marriage and join him on bombing runs over Europe. Visceral and deeply researched, the passages in the planes show Atkinson at her finest.

These beautifully wrought, deeply felt scenes give meaning to what came before, but with the inverted narrative, arrive too late—not for Teddy, perhaps, but for the reader.

The world is his oysterChef Sau del Rosario recounts his culinary journey in a new book

New category added to the 34th National Book Awards

Kate Atkinson moves backwardthrough a life in ‘A God in Ruins’

LEFT KNEE BETRAYS HOWARD

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mirror_sports@yahoo.com.phsports@businessmirror.com.ph

Editor: Jun Lomibao

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C1 | THURSDAY, Mmirror_sports@yahoo.com.ph

sports@businessmirror.com.phEditor: Jun Lomibao

NEW YORK—The Minnesota Timberwolves won the National Basketball Association (NBA)

draft lottery on Tuesday night, the first time since 2004 the team with the worst record won the No. 1 pick.

After years of bad luck in the lottery, things finally worked out for the Wolves, who can perhaps choose between big men Karl-Anthony Towns of Kentucky and Jahlil Okafor of national champion Duke to put next to Rookie of the Year Andrew Wiggins.

The Los Angeles Lakers moved from

they would have sent to Philadelphia if it fell outside the top 5. The 76ers are third followed by the New York Knicks, who had the second-best odds of winning but instead fell to fourth 30 years after winning the first draft lottery and drafting Hall-of-Famer Patrick Ewing.

Not since Orlando won the right to pick Dwight Howard in 2004 had the NBA’s ultimate game of chance came out in favor of the team with the best odds. The Timberwolves had a 25-percent chance of landing the top pick after finishing, 16-66.

hopes up after the Wolves had fallen backward eight times previously, including both times they were in the pole position, 1992 and 2011.

Several hundred fans gathered to watch on the big screen at Target Center in Minneapolis and erupted when the Lakers card came out of the envelope for No. 2, meaning Minnesota had finally earned the top pick for the first time.

“Hope is nice to have,” Jason Vincent said, a fan of the team since 2001.

The Lakers were the other big winners even without moving all the way to the

top five as a condition of their trade with Phoenix for Steve Nash in 2012. That was dealt this season to the 76ers, who could have ended up with two top-6 picks if the Lakers had fallen backward two spots.

The lottery sets the top-3 picks. The remainder of the 14 nonplayoff teams follow in inverse order of their won-loss record.

Things went according to form until the Knicks slid back two spots. General Manager Steve Mills hoped history could repeat by wearing Dave DeBusschere’s Naismith Memorial Basketball Hall of

wearing as the Knicks’ GM when they won the 1985 lottery.

The lottery began that year as a way to prevent teams from losing on purpose as a way to secure the top pick. Tanking may still exist—the 76ers have appeared to be angling for the draft with no regard for their record the last couple of seasons—but the Wolves appeared to lose honestly while battling numerous injuries with a young roster.

Their victory, with owner Glen Taylor onstage, was only the fifth time the team that finished with the worst, or tied for

WOLVOLVOL ES WIN LOTTERY; LLOTTERY; LLOTTERY AKERSAKERS M MOOVVEE TOTO N NOO. 2. 2

LEFT KNEE BETRAYS HOWARDDWIGHT HOWARD exits Game One with 11 minutes remaining. AP

STEPHEN CURRY leads the Golden State Warriors to a 110-106 comeback win over the Rockets. AP

After sweeping Houston in the regular season,

Stephen Curry and the Warriors this time

in the playoffs had to survive at home

against the Rockets against the Rockets after trailing by as

many as 16 points in the second

quarter.

B D LSan Jose Mercury News

OAKLAND, California—The Golden State Warriors continued their dominance of the Houston Rockets this season with a 110-106 win in Game One of the Western Conference finals on Tuesday. After sweeping Houston in the regular season,

Stephen Curry and the Warriors this time in the playoffs had to survive at home against the Rockets after trailing by as many as 16 points in the second quarter.

Curry scored a game-high 34 points, hitting six three-pointers to get the better of Most Valuable Player (MVP) runner-up James Harden, who took the game over at times and finished with 28 points. The Warriors had the last laugh, after Harden tied the score The Warriors had the last laugh, after Harden tied the score at 97 with 5:11 left as they proceeded to go on an 11-0 run. Harrison Barnes had back-to-back dunks off an inbound pass

and putback. Then Curry found himself open for a layup

under the basket and hit a three-

pointer. Houston responded with a 9-0 run to cut the lead

to two, but Curry calmly

sank two free throws with 11.8

seconds left to seal the win in the Warriors’ the win in the Warriors’

first conference finals game in 39 years.

“I think it’s just the Western Conference finals, they’re getting better and better,” Warriors guard Klay Thompson said of the Rockets. For Houston, it wasn’t nearly enough. Curry was six-for-11 from three-point range, fending off the Rockets’ challenges again and again. Shaun Livingston added 18 points off the bench, and Draymond Green collected 13 points, 12 rebounds and eight assists. Harden poured in 21 of his points in the second half

and finished with 11 rebounds and nine assists. He found room to work with while Dwight Howard missed much of the second half due to a knee bruise and was knee bruise and was

held to seven points and 13 rebounds. But the Warriors turned the game when they halted the momentum of the Rockets, who had entered the game on the heels of coming back from a 3-1 deficit to win their Western Conference semifinals series against the Los Angeles Clippers.

The Warriors trailed by as many as 16 points in the second quarter before issuing a heavy-handed response to the Rockets.

Closing the first half on a 25-6 run, the Warriors erased the deficit and took a 58-55 halftime lead. Curry hit a step-back jumper at the buzzer to send them into the locker room with all the momentum.

That shot was actually the only one from Curry during the run, which was keyed by a switch the Warriors made on defense and contributions from the bench.

Green drew the assignment at center and bothered Howard after Andrew Bogut had picked up three fouls in seven minutes of action.

Livingston scored 16 points in the first half, including eight of the Warriors’ points on a 10-0 run to cut the lead.

“You can’t give a really good shooting team easy lay-ups, confidence, and that’s what we did in the second quarter,” Harden said.

The crowd noise at Oracle Arena was deafening as Green then drew an offensive foul on Howard and scored on a tip-in at the other end. Howard would commit five first-half turnovers.

“They struggled a bit with the small lineup when they were big with Dwight, and that’s what kind of changed the game for us,” Green said.

After Thompson tied the score at 53 with a layup, the tidal wave continued as Barnes put the Warriors ahead with a three-pointer.

“I’m proud of the way we stuck with it, and we became the aggressor in the second quarter,” Curry said.

It was the Rockets who had gotten off to a hot start. They led, 31-24, after the first quarter and successfully scored in transition on the Warriors. Josh Smith hit a three-pointer and had a dunk in transition before Corey Brewer scored on a fast-break layup to cap a 9-0 run that gave the Rockets a 49-33 lead.

Howard didn’t look the same after colliding with Smith in the first quarter. He limped around and briefly went back to the locker room, but the Warriors could not take advantage of his absence, while the Rockets went on an 11-2 run.

Houston had led, 9-2, before Thompson scored seven straight points to tie the score and hit his only three-pointer of the game. Curry’s jumper put the Warriors ahead for the first time, and then he hit a three-pointer, while Howard and Smith were collecting themselves after the collision.

O AKLAND, California—Center Dwight Howard missed half of the Houston Rockets’ regular season with a right-knee injury. On Tuesday night in the

Warriors’ 110-106 victory in Game One of the Western Conference finals, it was his left knee that betrayed him.

Howard exited the game with 11:09 remaining with what was described as a left-knee bruise.

Howard, who averaged 17.6 points and 13.9 rebounds in the Rockets’ seven-game series win over rebounds in the Rockets’ seven-game series win over the Los Angeles Clippers, suffered the injury with 5:50 the Los Angeles Clippers, suffered the injury with 5:50 left in the first quarter when teammate Josh Smith rolled into his leg.

Howard returned late in the quarter and tried to play Howard returned late in the quarter and tried to play through the injury but scored just seven points before

taking a seat for good early in the fourth quarter.He had 13 rebounds in 26 minutes but also five

turnovers and just one blocked shot. Howard averaged 19.3 points and 10.5 rebounds in 41 regular-season games. His status for Thursday’s Game Two at Oracle Arena was not immediately known.

San Jose Mercury News

SPORTS C1

SERENE SABANG

CHEF SAU WRITES

WARRIORS IN GAME 1

LIFE D1

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INVESTMENT SUMMIT James Robinson, Harvard University professor of government and coauthor of the book Why Nations Fail, shares his political and economic insights on the Philippine progress in terms of institutional reforms; how the Philippine political and economic situation compares with that of its Asean neighbors; and what the next government must do to maintain this progress and achieve sustainable growth. This was held at the Financial Times-First Metro Philippines Investment Summit, with the theme “Boosting Competitiveness and Inclusive Growth as Asean Integrates,” held in Makati City on Wednesday. STEPHANIE TUMAMPOS

B C N. P J M C

THE contentious Tax Incentives Management and Transparency Act (Timta) hurdled the House Ways and

Means Committee on Wednesday, although a new point of contention surfaced—which agency would validate the incentive claims of registered companies: the Board of Investments (BOI) or the Bureau of Internal Revenue (BIR)?

BusinessMirror news@businessmirror.com.ph Thursday, May 21, 2015 A2

NewsJapan economy grows as investment, inventories rise Japan’s economy expanded for a second

straight quarter, beating forecasts as busi-nesses increased spending and built up

inventories after a recession last year.

MILITARY KINSHIP The ties that bind men transcend time and circumstance. In this particular case, the kinship between Ambassador Antonio L. Cabangon Chua, ALC Group founder, and Ret. Police Chief Supt. and Mrs. Amerodin T. Hamdag is cemented yet again with a visit from the man who, in 2013, helped form the police force of the future Bangsamoro under the seven-member Independent Commission on Policing. Cabangon Chua himself held the rank of a full colonel under the defunct Philippine Constabulary. Hamdag gifts Cabangon Chua with an ethnic collection of armaments native to the Bangsamoro.

Whether the 2.4-percent annualized gain in gross domestic product (GDP) reported on Wednesday can be maintained depends on consumers stepping in to buy the products that companies are piling up in warehouses. The median estimate of 28 economists sur-veyed by Bloomberg was for GDP to grow 1.6 percent in the three months through March from the previous quarter. Japan’s large, export-focused companies are showing signs of raising wages and un-locking more of their record cash holdings as the weaker yen inflates their profits. While this may be a comfort to Bank of Japan (BOJ) board members who begin a policy meeting on Thursday, the level of GDP adjusted for inflation hasn’t recovered from a sales-tax hike last year that sent consumption into a tailspin. “There is some good news. Companies are slowly becoming comfortable about invest-ing more as their profits rise,” said Yoshiki Shinke, an economist in Tokyo at Dai-ichi Life Research Institute. “The inventory increase isn’t anything positive—it’s a reminder of the damage done by last year’s sales-tax hike.” The jump in inventories added 0.5 percent-age point to non- annualized expansion in the first quarter, according to government data. Shinke said that by his calculations, GDP growth would have been just 0.4 percent without the gain in inventory.

Currency marketThe yen weakened 0.1 percent to 120.86 per

dollar at 11:11 a.m. in Tokyo. It’s slumped about 30 percent since Prime Minister Shinzo Abe came to power in December 2012 with a new plan to reinvigorate the world’s third-largest economy. The Japanese have yet to shed fully their deflationary mind-set, economy Minister Akira Amari told reporters in Tokyo. From the previous quarter, private con-sumption rose 0.4 percent, the same pace as in the final three months of 2014. In an illustration of how damaging the April 2014 sales-tax increase was to the economy, GDP adjusted for inflation is still about the same as it was in the April-to-June quarter of 2013. Capital investment gained 0.4 percent from the previous three months, rising for the first time in four quarters, today’s data showed. Japan’s aging manufacturing facilities and equipment may encourage further spending. Legacy of deflationNOMINAL GDP, which is unadjusted for price changes, grew an annualized 7.7 percent from the previous quarter, the most since the third quarter of 2011. The nominal level of GDP remains below its 1997 peak, and about where it was in late 1994—a legacy of its decades of stagnant growth and trenchant deflation. The GDP deflator, a broad measure of price changes, rose 3.4 percent from a year earlier. The central bank’s favored inflation gauge slowed to zero in February. It picked

up slightly in March but remains one-tenth of the BOJ’s 2-percent target. The two-day policy meeting ends on Friday. “The economy isn’t really strong enough to accelerate significantly from here but the GDP report confirms it is picking up,” said Masamichi Adachi, an economist at JPMor-

gan Chase & Co. “This is supportive for the BOJ as it has expected a moderate recovery. The central bank will reinforce its view that there is no need to ease now.” Net exports, or shipments less imports, subtracted 0.2 percentage point from non-annualized GDP growth, after a 0.3-point

gain in the previous quarter. “Uncertainties are rising in exports with slowing Chinese economy and a weaker than expected US economy,” Shinke said. “I expect annualized GDP growth will be weaker from April to June than in the first quarter.”

Bloomberg News

Ambassador Antonio L. Cabangon Chua, Aliw Broadcasting chairman emeritus and founder, is also the owner of the BusinessMirror. Aliw Broadcasting owns and operates radio stations DWIZ 882 khz in Manila; DWQJ 95.1 FM Naga; DWQA 92.3 FM in Legazpi; DYQC 106.7 FM in Cebu; DYQN 89.5 FM in Iloilo; DXQR FM in Cagayan de Oro; DXQM 98.7 FM in Davao; DXQS 98.3 FM in General Santos City; and DWQT 89.3 FM in Dagupan City. Under the measure, Aliw Broadcasting franchise shall be renewed, amending Republic Act (RA) 7399, the validity of which is only until 2017, subject to the provisions of the 1987 Philippine Constitution and applicable laws, rules and regulations. “The franchise granted to Aliw Broadcasting Corp. under RA 7399, hereunder referred to as the grantee, its successors or assigns, to construct, install, establish, operate and maintain for commercial purposes and in the public interest, throughout the Philippines, radio and/or television broadcasting stations, including digital television system, internet proto-

col (IP)-related services and IP-Value-Added Services, through microwave, satellite or whatever means, including the use of any new technologies in television and radio systems, with the corresponding technological auxil-iaries and facilities, special broadcast and other program and distribution services and relay stations,” the proposed measure said. The measure requires Aliw Broadcasting to provide adequate public service time to enable the government, through its broadcasting stations and facilities, to reach the population on important public issues and pro-vide at all times sound and balanced programming. Aliw Broadcasting should also promote public participation in community programming, assist in the functions of public information and education; conform to the ethics of honest enterprise; and not use its stations and fa-cilities for the broadcasting of obscene and indecent language speech, act or scene; or for the dissemination of deliberately false information or willful misrepresentation, to the detriment of the public interest, or to incite, en-courage or assist in subversive or treasonable act. Jovee Marie N. dela Cruz

BusinessMirror news@businessmirror.com.ph A4

Economybriefs

third batch of pdaf scam cases to be filed next weekJustice secretary Leila M. de Lima on Wednesday said that the filing of the third batch of cases involving the Priority Development Assistance Fund (PDAF) scam may be done next week.

According to de Lima, the final recommendation of the special investigation team created to determine who should be charged in connection with the PDAF scam will be completed next week.

the Department of Justice chief gave assurances that the result of the investigation will be immediately known just like what happened in the filing of the first batch of PDAF cases, including those filed against senators Ramon “Bong” Revilla Jr., Jose “Jinggoy” estrada and Juan Ponce enrile and several others.

De Lima also cited the filing of the plunder charges against the alleged PDAF scam mastermind Janet Lim-Napoles.

Napoles is the alleged “brains” behind the P10-billion pork barrel and the P900-million Malampaya Fund scams. PNA

recto pushes bill exempting pwds from 12% vatseN. Ralph Recto on Wednesday pushed for the passage of a bill giving the persons with disabilities (PWDs) additional benefits and incentives by exempting them from value-added tax (VAt).

”Our PWDs will soon be enjoying the same benefits accorded to our senior citizens once the bill granting them tax exemption is signed into law,” Recto said.

Recto, also senate president pro tempore, filed the senate Bill 2483, in December last year exempting the PWDs from VAt on certain goods and services.

At present, they are granted “at least 20-percent discount in all establishments” such as hotels, restaurants and recreation centers.

Recto cited a study by the united Nations economic and social commission for Asia and the Pacific which said that PWDs are often among the poorest segments of the population. PNA

“We are seriously looking at removing the process of validation from the BOI, in much the same way that the other investment-promotion agencies [IPAs] are not doing it. This is for better business facilitation, and we are inclined to remove it,” Quimbo said. Under the current draft of the Timta, in order for a BOI-registered business to avail itself of tax incentives, including the coveted income-tax holiday, it must first submit an income-tax return (ITR) electroni-cally to the BIR. When the company has complied with the mandatory e-filing, the BOI will validate the application for incentives claimed by the company based on the ITR. After the validation, the BOI will submit the documents to the BIR for auditing. The BOI, based on its chapter, is mandated to validate claims of reg-istered businesses on how much incentives they are entitled to. This authority is exercised, the BOI said, to make sure businesses are only given incentives that are related to their registered activity. The proposal to remove the validation process is seen as a fresh bat-tleground of control between the DTI and the DOF, as the BIR will wield broader control in assessing companies’ application for incentives. Instead of getting an initial validation from the BOI, companies’ application for incentives may be directly given to the BIR. “Not all revenues that a business claims are entitled to ITH incentive contrary to their statement. We have to check what part of the revenue is connected to their registered activity and deserves to be given incentives,” stressed BOI Governor Lucita P. Reyes, justifying the validation process. Quimbo, however, sees the current process of the BOI as “redundant,” since the BOI’s role is “recommendatory.” “It’s an additional imposition and has no purpose anymore. We are inclined to remove it. Validation should focus on the BIR,” Quimbo said. The proposal to remove the BOI’s authority came amid debates between the DTI and the DOF on several provisions of the Timta dur-ing Wednesday’s hearing.

grace period for e-filingTIMTA mandates all registered enterprises of all IPAs to electronically file their tax returns first, before the BOI can process the companies’ application for incentives. Given that the BIR’s electronic system for ITR filing has been de-fective and even bogged down due to problems, an agreement was reached between the DOF and the DTI. All IPA-registerd companies must still meet the April 15 deadline in filing ITRs, either manually or electronically, but an additional six months will be given to those who filed manually, to comply with e-filing. However, another set of debates broke out on the provision that the

BOI’s validation will delay the BIR’s assessment. Under the current Timta version, the BIR can only begin its own assessment after the BOI’s appli-cation and validation period—which could span 18 months—is over. The BOI is the only IPA that does validation on the claims of its registered enterprises; by virtue of their mandates, other IPAs only submit to the BIR the companies application of incentives and the certificate of registration. “Commissioner [Kim] Henares actually wanted a shorter period than the one year and six months given to the BOI so the BIR can start assess-ing the IPAs,” lawyer Nina Asuncion of the BIR said. BIR complained that the 18-month application and validation period of the BOI is too long, and that it already encroaches on the three-year auditing period that the BIR is entitled to, prompting the DOF to propose the scrapping of the BOI s power to validate altogether. “I think it will be a disincentive to BOI companies if we toll, or extend the period to 18 months. They will wait for a total of four years before waiting for the ax to fall; that’s too long,” Quimbo echoed. Quimbo, likewise, aired the possibility that the yearlong validation of the BOI can give time for unscrupulous companies to resort to corruption to ensure the BOI passes a clean validation report to the BIR.

dti says noTHE DTI, however, will be putting up a fight on any move to abolish its authority to validate incentive claims and transfer the authority to the BIR. “Under the law, it can be amended, but we’re not in favor of that. We contest any decision to remove validation because without it, the assess-ment can be subject to further corruption,” Reyes said. Reyes explained that the BOI is actually safeguarding the grant of too much incentives by checking the claims for tax perks. The BOI, she said, was able to save the government as much as P 1.7 billion in 2010. The amount is the difference between the incentive claims of companies and what the BOI actually approved. The House Committee on Ways and Means gave its temporary approval to the BOI’s 18-month period at the close of Wednesday’s panel hearing. But Quimbo said there is plenty of time to insert the removal of the BOI’s power, effectively amending its charter, during future deliberations on the bill. Quimbo is targeting to pass the Timta on second reading on June 11 before the House of Representatives’ sine die adjournment. The Senate’s version of the bill has also hurdled the Committee on Ways and Means, chaired by Sen. Juan Edgardo Angara. The senator said they will study Quimbo’s views on the BOI’s incentives-validation power. “We’ll tackle when we get there. What’s important is that the measure’s aim for transparency in the giving out of tax incentives is met.”

PhiLiPPiNe National Oil co. Renewables corp. (PNOc-Rc) and the Philippine heart center (Phc) signed on Wednesday a memorandum of agreement (MOA) to install a solar rooftop with 100-kilowatt (kW) capacity.

”PNOc-Rc and Philippine heart center today signed a MOA for the installation of a 100-kW solar Photovoltaic Facility at the Medical Arts Building, Philippine heart center, east Avenue, Quezon city,” the Department of energy said in a news statement. the MOA was signed by PNOc-Rc President and chief executive Officer carlos Jose Gatmaitan and Phc executive Director Manuel chua chiaco in Makati city.

PNOc-Rc and Phc will work together in maintaining the solar panels for 15 years. it will be turned over to Phc after the period.

PNOc-Rc will also sign a MOA with the Department of science and technology and the Department of health for a similar solar roof installation. PNA

Apec would also accelerate investments in Internet infra-structure as it recognized the rising importance of Internet economy in providing jobs and opportunities across the Asia-Pacific region.

Foreign Undersecretary Laura Q. del Rosario, Apec Senior Of-ficials’ Meeting chairman 2015, said no business sector or segment of society would be “untouched” by t he power a nd potent ia l of connectivity.

“Connectivity, through the In-ternet economy, will help bring SMEs [small and medium enter-prises] to market; improve edu-cation and health services deliv-ery; link small farmers to large markets; and change the way we design, create and consume prod-ucts and services, among others,”

she said. The majority of global Internet

users already reside in the region and that the number is grow-ing, indicating the importance of the Internet economy to the Asia Pacific.

But as economies mobilize to deal with the policy framework for managing this phenomenon, the lack of common legal and econom-ic frameworks to support the free flow of information is slowing the diffusion of Internet technologies, innovation and opportunity across the region.

This imposes costs on businesses and, especially, on SMEs looking to expand their opportunities and break into overseas markets.

“ We operate in si x A sean economies, and each has differ-ent regulations for third-party

New Timta point of contention rises. . . continued from a1

Aliw Broadcasting. . . continued from a1

Thursday, May 21, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

Apec developing policy, regulatory environment for Internet economy

Foreign Undersecretary Laura Q. del rosario (right photo), chairman on the Asia-Pacific economic Cooperation Senior officials’ Meeting (Apec SoM), answers questions from the foreign media at a news briefing for the ongoing Apec SoM at the international Media Center in Boracay island, Aklan province, on Tuesday. PNA

pnoc-rc, heart center sign m.o.a. for solar-rooftop facility

taxi-booking applications, like GrabTaxi. This means we have to do business one way in one market and another way in others, which disrupts scalability and the social impact we are trying to make,” said Nina Teng, vice president of public affairs for GrabTaxi.

She called upon regional econ-omies to collaborate with each other and companies on devel-oping new regulations for the Internet economy.

For his part, Eduardo Ped-rosa, secretary general of Pacific Economic Cooperation Council (PECC), underscored the impor-tance of collaborative efforts in-volving innovators, regulators and policy-makers.

“Things are moving so quickly if we rush to regulate, we might stran-gle the very innovations we want to promote,” he said.

Pedrosa said PECC has been contributing to Apec’s initiative on the Internet economy. PECC is the only non-governmental official observer of Apec.

He sa id t he inter nat iona l organization had established a task force composed of experts from business, academe and the government to determine issues that Apec would be addressing through the Ad Hoc Steering Committee. It will also provide some independent analysis of those issues and recommenda-tions for actions. PNA

BORACAY ISLAND, Aklan—Member-economies of the Asia-Pacific Economic Cooperation

(Apec) are working out an enabling policy and regulatory environment to support efforts to realize economic and social benefits offered by connectivity crucial to achieving inclusive growth.

By David Cagahastian

Finance Secretary cesar V. Purisima declared on Wednesday that the Philip-pines is in a far better position now than

in 2010, as the country prepares for another transition into a new administration come the presidential elections in 2016. in his keynote speech at the second annual Financial Times-First Metro Philippines invest-ment Summit, Purisima said the government’s slogan of good governance has translated not only in political reforms but, more important, in improvements in the country’s economy. and as the country prepares for another change in administration in 2016, Purisima said that he hopes the next administration would be able to build on the gains achieved during President aquino’s term, and that the elections will be less about personalities and more about credibility. Purisima noted that the gross domestic product (GDP) had grown at an average of 6. 3 percent during the last five years, and that during the last three years, the growth rate was over 6 percent. “The five-year average of 6.3-percent GDP growth was last achieved in 1976 to 1980; while the last time that the GDP growth in three consecutive years was over 6 percent was from 1954 to 1957, when the GDP growth rate hovered around the 10-percent range,” Purisima said. He said the aquino administration’s com-mitment to good governance translated to the improvement in the country’s economic fundamentals by producing a “domino ef-fect,” which started with increased confi-dence from the business community in doing business in the Philippines. “The biggest reason for the turnaround is the increased confidence. When you look at business, it’s all about confidence, and when the markets recognized that the good gov-ernance program was for real, they started lowering the risks, allowing us to borrow at lower rates, creating more space in the budget for more productive expenditures,” he said. “With lower rates and longer terms, dura-bles suddenly became more affordable. now we can see young graduates buying cars and even condominiums, which allowed us to get deeper into this virtuous cycle of economic

at the signing of a joint-venture agreement on Wednesday, officials from both firms announced their intention to build 250 megawatts (MW) by 2016. This will cost $600 million, and they will both equally invest in each project, and leverage their expertise in construction to compete the projects in time to avail themselves of the Department of energy’s (DOe) feed-in tariff, an incentive for the first 500 MW in solar projects to connect to the na-tional grid. By end of the year, the total solar capacity in the country is expected to reach 500 MW, up from 50 MW in 2014 and 5 MW in 2013. The partnership’s first project will be 60 MW in calatagan, Batangas, where construction has already be-gun. Once operational, the $144-mil-lion solar-power facility will supply enough power to the entire Western Batangas, and become the largest solar farm in Luzon. Targeting over three decades of operation, it is expected to off-set over 1 million tons of carbon dioxide, equivalent to planting over 5 million trees. Solar Philippines ceO Leandro

L. Leviste said the remaining 190 MW will be put up in Luzon and Mindanao this year. “There are two other sites that we are looking at. One in Luzon, which is going to be bigger, and another in Mindanao. These two, which will be ready for construction by third quarter this year, will complete the target 250 MW by 2016,” he said at a news conference. construction for a l l three projects will be completed by end of this year, Leviste added. “This marks our first entry into power generation, and we are happy to do it with a company that shares our entrepreneurial spir-it. We believe solar has massive potential for growth, and this is just the first of many investments we will make in clean, renewable energy [Re],” Megawaide ceO Michael cosiquien said. citicore is a sister firm of Megawide. “in a few years’ time, solar will become cheaper than fossil fuel, and one day supply the majority of the country’s energy needs. We are proud to partner with a company that shares our long-term perspec-

news@businessmirror.com.ph Thursday, May 21, 2015 A5BusinessMirrorEconomy

tive, and has made it a priority to turn this vision into a reality,” Leviste said. Separately, cosiquien said citi-core Power is gearing up to build 300 MW to 450 MW of Re within the year. The 250-MW solar-power capacity between citicore and Solar

Philippines is already part of this plan, he said. “We are looking at a 60-MW hydropower project in northern Luzon, with an initial capex [capi-tal expenditure] of $240 million,” he said, adding that financial clo-sure for the said project is expect-

ed within the third quarter this year. construction will start early next year. “We are also looking at a 12-MW biomass and we have identified a local partner for this, as well,” cosiquien added. cit icore Power wi l l secure

peso-denominated loans from local banks to partly finance its foray into the Re business. “We are looking at a debt-to-equity ratio of 70:30 but we are trying to achieve 80:20. However, this will highly depend on the reception of banks,” the official added.

Solar PHL, Citicore Power launch 250-MW renewable-energy ventureBy Lenie Lectura

Solar Philippines, the country’s largest solar provider, and Citicore Power, a unit of Citicore

Holdings Investment Inc., inked a partnership to build the largest solar portfolio in Southeast asia.

THe Joint House committees on energy, Gov-ernment enterprises and Privatization, and Mindanao affairs have approved on Wednes-

day the bill that aims to establish the proposed Mindanao Power corp. (Minpocor).

The bill, entitled “an act creating the Mindanao Power corp. and Providing Funds Therefor” was principally authored by Party-list Rep. edgardo R. Masongsong of 1 caRe, together with 33 other legislators, including Rep. Reynaldo V. Umali of Oriental Mindoro. it aims to substitute House Bill 676, 2621, and 4883.

Umali has presided the hearing, together with Reps. arnulfo Go of House committee on Mind-anao affair and Jesus Sacdalan of House commit-tee on Government enterprises and Privatization.

Resource persons and the legislators raised dif-ferent issues that they thought could hamper the passage of the Minpocor bill like the Bangsamoro basic law, and how it could affect the implementa-tion of Minpocor.

Both the legislators and the resource persons have expressed strong support for the passage of the Minpocor bill because of its importance in the development of Mindanao. Minpocor, if established, aims to provide sufficient but affordable power sup-ply across Mindanao.

Umali highlighted that the lack of sufficient and reliable power supply has resulted to the un-derdevelopment in Mindanao and other parts of the country.

He adds that stable power supply serves as a magnet for the people and therefore leads to in-creased economic activities. “That is the natural tendency. When you put in power, definitely people will gravitate toward it, and people would want to engage in some business,” Umali said.

The government, he added, should prioritize power in crafting laws and implementing projects. “Power precedes development,” Umali said. He add-ed that this will benefit greatly the Mindanaoans who had long suffered from inadequate power sup-ply and underdevelopment.

With the passage of the Minpocor at the com-mittee level, Umali said the measure needs to go through the committees on appropriation and ways and means before being tackled in the plenary.

Umali, cochairman of the Joint congressional Power commission and the Joint congressional Oversight committee on Biofuels, likewise, urged his fellow legislators to hasten the passage of the bill, because the upcoming campaign season for the 2016 elections might sidetrack the bill’s enact-ment into law. PNA

3 House panels approve bill on Minpocor creation

development,” he added. aside from good governance, Purisima said the prevalence of the rule of law in the country also helped in increasing the confidence of investors in doing business in the Philippines. “Rule of law is very crucial to business. When you enter a country, you want the assurance that the contract that you en-ter into is worth every dollar that you put in for it, and that you would be able to hold the other party to that contract,” Purisima said. Purisima said one of the biggest contri-butions that the aquino administration has made is to make the people believe that there is hope in the Philippines, and all that the next administration would have to do is to continue the good governance reforms and build on the achievements in the last five years. “We still have a long way to go, but what President aquino did was to point to the right direction and make us believe that we can ac-tually have a better country,” he said.

DOF’s Purisima says Philippines in ‘better position’ than in 2010

ceBU ciTY—The cebu city gov-ernment has invited contractors to join the rebidding of the new

billion-peso cebu city Medical center (ccMc) project, but they must have completed a similar project in the last five years to qualify. cebu city engr. Jose Marie Poblete, who heads the Bids and awards com-mittee for the hospital project, said the criterion was put in place to “safeguard” the billion-peso project.Poblete said they are required and man-dated to follow the law as the project involves public funds. But he said that, instead of a past hos-pital project worth at least P300 million, the Bac would only require 50 percent of the amount for the ccMc construc-

tion that costs nearly P600 million for first phase alone. This is allowed under Section 23 of the implementing Rules and Regula-tions of Republic act 9184, the Govern-ment Procurement Reform act. “The prospective bidder must have experience of having completed at least one contract that is similar to the con-tract to be bid[ded out] and whose value, adjusted to the current prices…,” the iRR read. Poblete said they are lowering the requirement to entice more inves-tors to participate in the rebidding. “We can’t remove the five-year requirement but we are imposing the 50 percent [less] of the total con-tract cost instead of P300 million,” he said. PNA

Cebu City LGU starts rebid of new billion-peso hospital

Solar Philippines and Citicore Power Inc., sister firm of Megawide, signed a joint-venture accord to build $600 million worth of solar power projects across the country capable of generating 250 megawatt of power. Photo shows (from left) Megawide CFo oliver Tan, Megawide CEo Michael Cosiquien, and Solar Philippines CEo leandro l. leviste at the signing ceremony. NONOy Lacza

SuMMer Souvenir a comely store clerk points at the image of Mayon Volcano painted on a huge colorful fan being sold at an establishment in Taguig City. local and foreign customers like buy these fans either as gifts for their loved ones abroad or for personal use while spending their summer vacation in the country. aLySa SaLEN

Thursday, May 21, 2015

OpinionBusinessMirrorA6

Don’t rock the boat, baby

editorial

THE Palace bullhorns have been busy these past few days, painting a double-sided picture of the response the Philip-pine government would make should the Rohingya Muslim boat people enter our area of jurisdiction.

Palace Communications Secretary Herminio B. Coloma Jr. first said to the media that the country might turn the refugees back to the sea if they cannot present “travel docu-ments.” He later clarified that the Philippine government can only act in accordance with the United Nations’s (UN) convention on refugees and “stateless” people.

Myanmar has, time and again, refused to recognize the Rohingya Muslim people as its own, forcing them to flee as stateless refugees due to systematic persecution. The same is true with Bangladesh, which refuses to call the Rohingya people as Bangladeshi.

A little over 6,000 Rohingya Muslims recently fled violent persecution from Buddhists in Myanmar toward Malaysia, Thailand and Indonesia in boats left abandoned by smug-glers and pirates. The UN and, recently, the United States had called on Asian ports to open their doors to the boat people, as many are close to dying or had already died dur-ing their trip by sea.

Thousands of these impoverished refugees have yet to be accommodated in Thailand, whose migrant-boat policy includes the giving of food and other supplies, but never to land onshore. Indonesia, on the other hand, had already opened its shores, granting the refugees safe passage, however temporary.

As for the Philippines, the Rohingya boat people are still a long way off, roughly 1,800 kilometers from those in Indonesia and about 2,300 km from those in Thai waters.

Given our history, however, of helping thousands of boat people who fled from Vietnam after the Vietnam War, Malacañang has apparently “milked” the issue for what it’s worth in positive public perception. The Philippines and Thailand were only two among 48 nations that signed the Universal Declaration of Human Rights in December 1948.

In the 1970s the Philippines put up the Philippine Refugee Processing Center in Morong, Bataan, where the refugees were given temporary shelter, food and supplies until they were repatriated to Vietnam and other host countries, like Canada and the United Kingdom.

The tragic migration of these boat people had led many to question why member-countries of the Association of Southeast Asian Nations refused them safe passage. Back home, it has led numerous netizens to ask if the Philippines will continue its historical stance of helping refugees regain a foothold on life.

How all these will pan out remains to be seen. For now, any claim from Malaca-ñang is neither worth gold nor salt until the government has taken solid steps to help the Rohingya people.

And why rock the boat of public perception by speaking ahead of the Rohingya’s arrival to our shores? The Philippine government can even now fund a rescue mission to these boats. Action always speaks louder than words.

MAYBE you are one of those people who have a special month when big things always seem to happen. It goes beyond the month of your birthday, when you got married, or the

birth of a child. By design or destiny, events in August, for some reason, always are “life-changing” for me.

ONE year ago, after Narendra Modi’s election as prime minister of India, I explored how Asia’s biggest economies were suddenly in the hands of leaders pledging huge

economic reforms. Like Modi, Japan’s Shinzo Abe and China’s Xi Jinping were promising to deliver big changes. How have things fared since then for Asia’s “Axis of Reform”?

October is coming

A report card for Asia’s ‘Axis of Reform’

For the global stock markets, October is the one. Average performance for the month of October is relatively good. But in the United States, the “Panic of 1907” started in October and, of course, the 1929 stock-market crash. October 19, 1987, saw global markets collapse, with the US down 23 percent. By the end of October, stock markets in Hong Kong had fallen 45 percent, Australia 42 per-cent and Spain 31 percent.

But October is notable for other events outside of the markets. Ger-many annexed part of Czechoslova-kia in 1938. The People’s Republic of China was founded with Mao Zedong as chairman in 1949. The Cuban Mis-sile Crisis happened in October, as well as the founding of the United Nations. In the Philippines the larg-est naval battle in world history took place in Leyte Gulf and in 1942, US Gen.

Douglas MacArthur returned to the Philippines in October.

Other months are just as important, but maybe October holds some special significance.

Many governments and corpora-tions around the world close their books and fiscal year at the end of September. Companies also hold plan-ning meetings for the following year at this time to avoid the holiday season. Consumer companies are also gearing up for the holidays.

This coming October may be one for the history books, as the International Monetary Fund (IMF) holds its annual meeting. One critical topic of discussion will be the composition of the basket of currencies included in the IMF’s Special Drawing Rights (SDR).

You can think of the SDR as an in-ternational monetary-reserve currency.

The Philippines holds its international reserves, excess international curren-cies, in whatever currencies are flowing into the country net of foreign curren-cies flowing out. For example, a Japanese tourist may bring yen into the Philip-pines, while an importer may need yen to buy Japanese goods. The Bangko Sen-tral ng Pilipinas keeps a stock of foreign currencies available at all times. Most is probably held in US dollars, as most trade is still settled in the US currency.

The SDR system allots a certain amount of SDRs to each nation based on the size of the economy. The Philip-pines’s allotment is $720 million, while Thailand’s is $885 million. The SDR al-lotment is sort of like a credit line, if a nation runs short of foreign currency.

The SDR credit line is available in four currencies: US dollars, euros, Japanese yen and British pound sterling. Greece just paid a loan payment by borrowing euros against its SDR allotment because it is out of cash. The selection of which currencies and the percentage mix (cur-rently 42-percent dollar, 38-percent euro, 11-percent pound and 9 percent yen) is decided every five years by an IMF committee, and will be again in October. At the 2010 meeting, the weight of the dollar and yen was decreased, as the euro and pound was increased.

The criteria are currency exchange-rate stability, free convertibility and use in international trade. At this com-ing meeting, China wants its renminbi included in the SDR formula.

If China can get this, it would, in ef-fect, mean that the renminbi would be a global reserve currency and would reduce the impact and weight of the US dollar. This is one reason China has been push-ing so hard for all those currency swaps around the world, to be able to settle trade outside of the US dollar. The US will try to block this, as it holds 17 percent of the IMF votes. But only a 70-percent majority is required to approve it in the SDR, if China can convince the IMF that its currency meets the standards.

The big concern is that the renminbi is not allowed to float freely. But there is plenty of time for China to relax its grip on the currency exchange rate, if it feels it has the 70-percent votes.

If the renminbi becomes part of the SDR, it will be a global trade and finan-cial-market game changer, and will mark a significant and dramatic difference in the way the world has operated for the last 40 years. US economic influence will be reduced just a little more, and China’s goal for superpower status in the 21st century will be closer.

Once again, we are going to see some major shifting in the markets after the end of the third quarter. This IMF meet-ing is just another reason why.

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

OUTSIDE THE BOXJohn Mangun

BLOOMBERG VIEWWilliam Pesek

Not very well, unfortunately. “Prog-ress on reform across Asia remains frustratingly slow,” economist Frederic Neumann of HSBC in Hong Kong says. Although Modi, Abe and Xi each seem to have properly diagnosed the prob-lems facing their countries, their policy responses are still more rhetoric than reality. Let’s consider each individually.

Modinomics: Modi has pulled off a few major legislative victories since the euphoria of his May 2014 election. The ambitions of Modi’s Bharatiya Janata Party seem to have been hemmed in by the sheer day-to-day difficulty of managing a vast nation of 1.2 billion people. His bold plans to create a na-tional sales tax and liberalize key sectors like retail were replaced by small-target wins—cutting red tape for companies, upping foreign investment in defense, and insurance and bank accounts for the

poor. It has been a far cry from the lib-eralizing “Reagan-Thatcher” moment banks like BNP Paribas had predicted after Modi’s election.

Still, judging purely from results, In-dia’s prime minister has been the most impressive of his peers. Just two years ago, India’s economy seemed headed for junk status. Today it is on a path to achieving an 8-percent growth. That could provide Modi with the momen-tum he needs to pass further reforms and make India one of the world’s leading economies.

There’s another reason to be optimis-tic about Modi: his partner in reform at the Reserve Bank of India, Raghuram Ra-jan. Unlike the central bankers of other countries, who have enabled complacent politicians by lowering borrowing costs, Rajan has stayed firm. It’s true that the prime minister still needs to take bolder

action. For now, though, I’ll give him a grade of B.

n Abenomics: In December Prime Minister Abe successfully arranged an early election to win a new mandate for his three-pronged economic-revival strategy. Five months on, Abe has carved out plenty of time to tweak defense laws to allow Japanese troops to fight overseas. But he’s expended little en-ergy battling Japan’s excess of business regulations, retrograde tax code, high trade barriers or impediments to entre-preneurship and increased productivity.

In truth, since taking office two-and-a-half years ago, Abe has only truly fired one of his economic program’s three so-called arrows—monetary easing. The Bank of Japan (BOJ) has managed to weaken the yen by 30 percent, which has boosted the Nikkei stock exchange. But the flight of Abe’s second arrow—fiscal expansion—was curtailed prematurely when Tokyo raised sales taxes in April 2014, which triggered a recession and made companies less inclined to raise wages. Meanwhile, the third and most important arrow—structural reform—has never left the quiver, Richard Katz of the New York-based Oriental Economist Report says. The BOJ’s largess, he says, has been a “narcotic to avoid making needed changes.” As a result, Abenom-ics gets a “C-”, at best.

n Xiconomics: Xi has undertaken the most difficult challenge of all: a vast ef-fort to shift China’s economy away from excessive investment and exports and toward services. And he has made some

progress. By purging corrupt officials, Xi has set a new tone in Beijing. He has also allowed some companies to default and clamped down on excessive borrowing.

But Xi has shown little sign he will tolerate the sort of sharp slowdown that would have to accompany any na-tional economic realignment. What’s more, he seems to be emulating the Japanese government’s worst habits by papering over the country’s most troubling economic cracks. Xi’s plan to address mushrooming China’s local-government-debt —which is now larger than the entire German economy—is to have the country’s central bank ar-range to swap it for fresh loans. That should be called what it is: pretending the problem doesn’t exist.

Xi ’s aggressive censorship cam-paign suggests he’s more interested in taking down personal rivals than purging the Communist Party’s worst impulses. And his plans to give markets a “decisive” role in the economy, rein in state-owned enterprises, curb shadow banking and unleash a start-up boom are simply too vague to judge. For now I’ll give him a “C+.”

It’s not that the past year’s events in New Delhi, Tokyo and Beijing don’t show some signs of promise. But there’s not yet enough tangible progress to justify those governments’ outsized reputa-tions for ambition. In the next days I’ll offer report cards on three other Asia re-form stories: Korea, the Philippines and Indonesia. Perhaps, those countries will comprise Asia’s real “Axis of Reform.”

Thursday, May 21, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

Glorified in the whole truth

Glorious is the lord in His work of creation; His spirit renews the face of the earth (Psalm 104:1, 24, 29-30, 31, 34). The glorious Jesus will send the spirit of truth to His

disciples, who will glorify Him in guiding them to the whole truth (John 15:26-27; 16:12-15).

Send forth Your SpiritPsalm 104 begins by acclaiming the greatness of God. From his in-nermost being, the psalmist is called upon to offer praise to God. God is truly great, clothed with honor and majesty, wrapped in a mantle of radi-ant light. it is not as if God is visible, but God’s garments are discernible: the glories of creation revealing the greatness of God. The splendor and the order that exist in the universe are indication of His presence and evidence of His glory. indeed, the earth is full of God’s grandeur in His creatures. Not only in its appear-ance is the natural world marvelous, its very complexity is absolutely as-tounding, manifesting the wisdom of their Creator (cf. Proverbs 8:22-31; Wisdom 9:9).

And not only the act of creation, but also the unceasing divine provi-dence in creation makes God’s glory evident. God takes fatherly care of all living things, sustaining them and providing for them. Creation is not something once for all in the distant past; it is ongoing and the

power of God is experienced in the constant renewal of life all around. God’s glory in creation reflecting His ongoing action should endure forever; may He continue to delight in His works! His breath, His spirit keeps them alive—the same spirit/breath that made man a living be-ing (Genesis 2:7). Without the divine spirit, creatures return to the dust whence they were taken. For God who creates also recreates; with His spirit life is sustained and renewed as in a new creation. That is reason enough to praise the lord.

The advocate from the Father and the SoniN the Fourth Gospel the Holy spirit is called “Paraclete,” the Advocate or Helper. The spirit helps Jesus con-tinue the work he has started and, therefore, helping those who are called by Jesus to salvation. Giving the basics of the Trinitarian perspec-tive, it is twice said that the spirit will come from the Father and sent from the son Jesus. The Father is the fountainhead from whom the

spirit proceeds, and the spirit comes as the witness of Jesus, sent by Him to guide the disciples who will also be His witnesses. Jesus must be one and present with the Father, in order to be able to send their spirit to them (John 16:7).

“All have the same life-breath,” says Qohelet (Ecclesiastes 3:19). it is the one spirit/Breath of the Father and the son who gives the new life to the disciples and to the world. This spirit is “the grandeur of God…[that] will flame out, like shining from shook oil,” writes the priest-poet Gerard Manley Hopkins:

“There lives the dearest freshness deep down things;

and though the last lights off the black West went

Oh, morning, at the brown brink eastward, springs—

Because the Holy Ghost over the bentWorld broods with warm breast and

ah! bright wings.”

The Spirit of TruthTHe Holy spirit is also called the spirit of Truth in the Fourth Gospel. in the world’s search for truth, the Advocate spirit’s role is to witness to and glorify the son who is the Truth. The son shares in everything the Father has, and the spirit makes known to all the mystery of the son and, therefore, reveals to the world, as well, the mystery of the Father. The spirit will guide the disciples of Jesus to the whole truth, to ever deeper understanding of Jesus’ revela-tion, even as they have not as yet fully comprehended what Jesus has told them already. Jesus has

many more things to tell them, but they cannot bear them now at the moment. The Advocate spirit will be there to instruct them about the things that are to come, tak-ing what is of Jesus and making it known to them.

Again, Gerald Manley Hopkins in 1877, just before his ordination to the priesthood, captured in his poem “The Windhover” what being caught up with the Holy spirit means in his union with Christ the lord:

“I caught this morning, morning’s minion,

kingdom of daylight’s dauphin, dap-ple-dawn-drawn Falcon, in its riding

of the rolling level underneath him steady air, and striding

high there, how he rung upon the rein of the wimpling wing

in his ecstasy! Then off, off forth on swing,

as a skate’s heel sweeps smooth on a bow-bend; the hurl and gliding

rebuffed the big wind. my heart in hiding

stirred for a bird,—the achieve of, the mastery of thing!”

Alálaong bagá, with Pentecost we celebrate the in-breaking of the time of fulfillment—in the power of the Holy spirit. The fullness of the spirit renews the earth, filling the whole world with God’s grandeur, ready to ignite—if we will. “Come, Holy spirit, come! shed a ray of light divine…our inmost being fill!”

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

AlálAong BAgáMsgr. Sabino A. Vengco Jr.

The price is right, or Uber will raise it

oNe can’t help but admire uber’s willingness to follow the basic logic of economics any place it happens to lead. even to price gouging. soaring prices after a natural disaster or

during extreme weather are simply, economists would say, the market’s response to changing supply and demand, as disruptions make it harder to get some things just as demand spikes (for instance, for generators, gasoline, bottled water, first-aid supplies).

Capital asset but not subjectto 6-percent capital gains tax

THe type of imposable transaction taxes largely depends on the nature of the asset involved. For instance, for income- tax purposes, sale of capital asset is subject to capital-gains

tax, while sale of ordinary asset is subject to the ordinary income tax. That is not, however, always the case. it may also depend on who the seller is.

sale of real properties classified as real properties is subject to the 6-percent capital-gains tax, regard-less of whether the seller is an indi-vidual or a juridical entity. However, sale by a corporation of machiner-ies and equipment, though forming part of capital assets, is not subject to this tax. instead, it is subject to the normal corporate-income tax. This was the pronouncement of the supreme Court (sC) in G.r. 175410 promulgated in November of 2014.

sometime in 1998, a Philippine economic Zone Authority (Peza)- registered entity constructed build-ings and purchased machineries and equipment. However, the entity failed to commence operations and its factory was thereafter closed. Hence, it sold its buildings and some of the machineries and equipment installed in the building. on ac-count of the sale, the taxpayer paid the 5-percent final tax applicable to Peza-registered corporations on the entire gross sales.

realizing that the tax was erro-neously paid, the taxpayer applied for refund. The tax court confirmed that the payment of the 5-percent tax was erroneous. However, the claim was not granted, since the properties sold, consisting of build-ings and machineries and equip-ment, were capital assets subject to a 6-percent capital-gains tax. The taxpayer appealed the decision, con-tending, among others, that the ma-chineries and equipment sold were not subject to the 6-percent capital-gains tax. The sC agreed and made a distinction between individuals and corporate taxpayers insofar as the imposition of capital-gains tax on real properties is concerned.

Before a taxpayer’s property can be subjected to capital-gains tax, the same must form part of the taxpay-er’s capital assets. “Capital assets,” as defined under the Tax Code, refers to taxpayer’s property that is not any of the following:

1. stock in trade;2. Property that should be in-

cluded in the taxpayer’s inventory at the close of the taxable year;

3. Property held for sale in the ordinary course of the tax- payer’s business;

4. Depreciable property used in the trade or business; and

5. real property used in the trade or business.

The properties involved in this case include taxpayer’s buildings, equipment and machineries. They are not among the exclusions enu-merated in section 39(A)(1) of the National internal revenue Code

(NirC) of 1997. None of the prop-erties were used in taxpayer’s trade or ordinary course of business be-cause taxpayer never commenced operations. They were not part of the inventory. None of them were stocks in trade. Thus, based on the definition of capital assets under sec-tion 39 of the NirC of 1997, they are capital assets.

However, corporations and in-dividuals are taxed differently. For individuals, they are liable to capital-gains tax on sale of all real proper-ties in the Philippines classified as capital assets. For corporations, the Tax Code treats the sale of land and buildings, and the sale of machiner-ies and equipment differently. Cor-porations are subject to the 6-per-cent capital-gains tax only on the presumed gain realized from the sale of lands and/or buildings only. The tax code does not impose the 6-per-cent capital-gains tax on the gains realized from the sale of machiner-ies and equipment. Therefore, only the presumed gain from the sale of taxpayer’s land and/or building may be subjected to the 6-percent capital-gains tax. The income from the sale of machineries and equipment is subject to the provisions on normal corporate income tax.

Finally, the Court reiterated its pronouncements in a plethora of cases that the rule in the interpre-tation of tax laws is that a statute will not be construed as imposing a tax unless it does so clearly, ex-pressly and unambiguously. A tax cannot be imposed without clear and express words for that purpose.

Accordingly, the general rule of requiring adherence to the letter in construing statutes applies with pe-culiar strictness to tax laws and the provisions of a taxing act are not to be extended by implication. As bur-dens, taxes should not be unduly ex-acted nor assumed beyond the plain meaning of the tax laws.

Reynaldo m. Prudenciado Jr. is a senior tax specialist of Du-Baladad and associates law Offices, a member firm of World Tax services alliance. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any spe-cific matter. applicability of this ar-ticle to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at reynaldo.prudenciado@bdblaw.com.ph or call 403-2001 local 380.

By Alan D. Mutter | los angeles Times/TNs

THe natural order of the universe was disrupted recently when BuzzFeed, NBC News, The New York Times and a number of other media companies ceded to Facebook the marketing

and monetization of portions of their valuable content.

Why publishers had to partner with Facebook

Here’s how the deal works:The media companies will give

full articles and videos to Facebook, so the social network can distribute them among its more than 1.4 bil-lion users. Publishers keep all the revenue from any ads they sell to accompany the content they allow Facebook to post. if Facebook sells the ads displayed next to the pub-lisher’s content, both sides will split the proceeds equally.

The move, which represents a further step in the transfer of power from the media tribe to the technol-ogy tribe, means that some of the big-gest names in media have conceded that they are neither large enough nor strong enough to thrive as in-dependent digital publishers with-out the help of at least one of their fearsome frenemies in silicon Valley.

in addition to Facebook, the other frenemy, of course, is Google. Although media companies like to think that the quality of their work speaks for itself, Facebook and Google referrals steer the pre-ponderance of the traffic to almost

every news site.The Facebook deal institution-

alizes as never before this long-running dependency. in addition to the trio mentioned above, the other media companies that will be fun-neling content to Facebook are The atlantic, BBC News, Bild, The Guard-ian, National Geographic and spiegel online. Fearful of being left behind, it is fair to assume additional media names in the not-too-distant future will feel obliged to join, too.

The choice to throw in with Face-book could not have been easy for the proud media companies. Historically, the last thing they wanted was to give their expensively produced content to another brand competing for the same readers and ad dollars. But that was then, and this is now.

Difficult as the decision may have been, it was inevitable, given Face-book’s global reach and the several critical capabilities that the company has developed. These are its not-so-secret superpowers:

n Superior mobile prowess. in ad-dition to the sheer size of its audience,

Facebook has mastered the art and science of mobile publishing bet-ter than almost anyone. in the first quarter of this year, the company re-ported, 65 percent of its traffic and 73 percent of its ad revenue came from such highly optimized mobile sites as its Paper app.

n Superior audience engagement. Based on the amount of time people spend on Facebook, it is fair to say that its users are considerably more passionate about the service than the visitors to a typical news site. According to Alexa.com, the aver-age user spends 18.4 minutes per day on Facebook, compared with 9.5 minutes at The New York Times, 6.4 minutes at NBC News and 5.4 min-utes at BuzzFeed.

n Superior customer data. Be-cause enthusiastic users frequently and liberally update Facebook with a plethora of personal data, the company knows more intimate and more accurate details about more people than any company in the world. The information is updated dynamically in real time, as people report everything from their favor-ite new song to the jeans they want to buy to the fact they will have a baby in six months.

n Superior ad intelligence. Face-book enables advertisers to target messages with heretofore unprec-edented precision, thanks not only

to the rich information supplied by users but also by analyzing infor-mation captured from the friends in their networks. The ad intel is supplemented with location data acquired from Facebook’s popular mobile services.

n Superior content targeting. in the same way data are used to tar-get commercial messages, Facebook has the capability to match the right content with the right user by moni-toring searches and media consump-tion. if Facebook sees that someone likes cooking italian food, it can slip relevant recipes from The New York Times food page into that user’s news feed, paired conveniently with an ad for a pasta maker. When Facebook recognizes that a bride is planning a honeymoon in Florida, it can send travel videos embedded with custom-ized hotel offers.

With everything Facebook brings to the party, the partnership ought to be a plus for the participating me-dia brands. But some media partners may experience buyer’s remorse if Facebook trims their split after they get hooked on this welcome new stream of incremental revenue.

it seems fair to conclude that the media companies that took the leap felt they were damned if they did and damned if they didn’t. in the end, however, this was an offer they couldn’t refuse.

The price increase helps cut down on marginal uses (taking a bath with your bottled water), while drawing new sup-ply in from unaffected regions, because people there now have a strong incentive to load up supplies and go sell them in the affected area—quickly.

The market is working. But the op-tics are terrible. Humans intuitively see price gougers as bad agents, exploiting the suffering of others. so even in the absence of price-gouging laws, busi-nesses try to avoid raising prices under

extreme conditions. Whatever they could gain in immediate revenue, they would lose more in future sales as dis-gusted customers walk away.

That’s most businesses. uber, how-ever, just called it “surge pricing” and let prices rise with demand. There has been some transitory squawking, but by and large customers have accepted it. increas-ingly, the company is following similar logic on the compensation side—that is, rather than setting a commission and leaving it there, uber seems to be

spending a lot of time playing around with the compensation structure, most recently by testing a program which gives the company a higher cut of the fares, especially from folks who don’t drive that much. obviously, there are some advantages: The latest structure encourages people to drive full time rath-er than part time, and uber will make more money off of its part-time drivers than it used to. But there’s a reason most companies don’t do much of this, with either wages or prices.

i know, i know: it can seem like com-panies spend all their time trying to chisel every last dime out of their sup-pliers and staff. But the surprise in the economic literature is how little they do this, even when they could get away with much more. one reason for that is that the chiseling tends to create some unhappy side effects.

After all, uber is not exactly the first

company to discover that they might be able to make more money by a) shifting the terms of their contracts more often to b) test more lucrative and complicated compensation schemes that c) try to chan-nel behavior in ways more in line with the company’s goals. Ask any sales rep who’s been in the business for a while, and they can regale you with all the crazy new compensation schemes they’ve lived through, often expensively constructed with the help of outside consultants. And yet, frequently, these efforts end up abandoned. Why? Because it’s often coun-terproductive; what you gain in revenue, you lose in morale. A front-line employee or contractor is the public face of your firm. if they think that no matter what they do, you’ll keep altering the payment system in order to shake every last penny out of their pockets, they’ll get surly or quit. Managers will waste a lot of energy having fights about the compensation

system. so many companies fall back to somethingthat’s reasonably straightfor-ward and predictable.

of course, this doesn’t apply as strong-ly to part-time and contract workers, like uber drivers; companies are much more willing there to cut pay, or encourage turnover so that they can pay workers less. However, it’s a dangerous strategy for any company whose workers are close to the customers. one disgruntled con-tractor can do a lot of damage before you figure out what’s happening. And since uber needs its contractors to invest in and maintain a late-model car, the company probably needs to provide some up-front assurance that the investment in the car will not become an albatross.

The risks of frequent revisions will become a bigger problem as uber matures. right now, uber gets a fair amount of leeway from both custom-ers and drivers because, after all, you

don’t have to deal with the company if you don’t want to. They’re not foreclos-ing the other options you already had, just opening up new ones. Dealing with uber is, in other words, a form of what Mike Munger has dubbed euvoluntary exchange, which is a fancy Greek way of saying truly voluntary trade.

if i were a contract driver and i didn’t want to drive for uber, i could drive for lyft, or apply for a taxi license, or decide to do something else entirely. As a rider, if i don’t want to pay uber’s surge pric-ing, i can resort to whatever i would have done a few years ago, when there was no uber. so even if i don’t particularly like the deal they offer, it doesn’t feel coercive.

on the other hand, if the company succeeds in pushing taxis and other po-tential employers out of business, then the deals uber offers will feel less and less voluntary—which means that the com-pany will get more and more pushback.

TAx lAw for BuSineSSreynaldo M. Prudenciado Jr.

By Megan McArdle | Bloomberg View