B B C

THE tentative growth outlook of many of the large economies—

most particularly the slowdown in China—is the single largest threat to the growth of emerging markets in the Asia Pacific, according to UK-based Fitch Ratings. In the Philippines, the Bangko Sentral ng Pilipinas (BSP) said the effect of the slowdown in China is most evident in investments, as well as in the export sector.

In its first-quarter risk assessment of the Asia Pacific re-leased on Monday, Fitch said China’s growth remains one of the key determining factors to the future growth of neighbor economies in the region. In other words, a threat to China’s growth could prove detrimental to the growth in specific economies in the region.

“The lack of sustained and robust demand recovery across the world’s major economic drivers continues to have implications for the risk profiles of Asia Pacific credit ratings. Slowing growth in China, in particular, remains one of the most significant potential risk factors for the region,” Fitch reported.

Second of three parts

DESPITE strong opposition from the business sector, the Aquino administration seems bent on

enacting the Tax Incentive Monitoring and Transparency Act (Timta) and the Ra-tionalization of Fiscal Incentives (RFI) bill. Finance Secretary Cesar V. Purisima, the chief proponent of the two fiscal measures, had said the government is losing at least P144 billion in revenues annually due to the grant of income tax holiday (ITH), reduced income-tax rates and duty exemptions to investments. “This represents a significant loss in revenues: 1.5 percent of gross domes-tic product, 9.3 percent of government’s expenditures or 10.6 percent of govern-ment revenues in 2011. These figures are conservative given the report covers only 29 percent of all IPA-registered firms,” the Department of Finance (DOF) said in its first Tax Expenditures Report covering 2011, re-leased mainly in support of the lobbying

for the passage of Timta and RFI. In 2011, however, data showed that the Board of Investments, Philippine Economic Zone Authority and other investment promotion agencies (IPAs), approved P746.8 billion worth of new investment commitments from local and foreign businessmen—fresh capital infusions that would not have come in if the country’s fiscal-incentives regime was different. See table 2. This is the bone of contention that busi-ness groups want ventilated in opposing the passage of Timta and RFI. The American Chamber of Commerce in the Philippines (AmCham), as part of the Joint Foreign Chambers (JFC), has stood its ground that any change in the investment scheme will only cast doubt on future investments in the Philippines. “Why fix it if it isn’t broken? If it’s a question of redundant incentives, there are numerous laws they can tweak, but don’t change the existing one,” said John Forbes, senior adviser to the AmCham, in

an interview. Forbes was referring to the mandatory list of activities and areas being given in-centives in the yearly Investment Priorities Plan, by virtue of existing laws, numbering to more than 50. These laws have also irked the DOF as aggravating the redundancy of incentives. The same sentiment is echoed by other foreign business groups represent-ing the Philippines’s main trade partners and top investment sources, including the European Chamber of Commerce in the Philippines (ECCP) and the Japanese Chamber of Commerce in the Philippines. “Investors will always compare, more so now that we have the Asean integration. We had $6.2 billion in for-eign direct investments last year; that’s because of incentives. If the adminis-tration succeeds in putting those mea-sures through and shrink the incentives scheme, future investments will go somewhere else,” said Henry Schumacher,

www.businessmirror.com.ph ■�TfridayNovember 18, 2014 Vol. 10 No. 40 P. | | 7 DAYS A WEEK■�Tuesday, May 5, 2015 Vol. 10 No. 208

A broader look at today’s businessBusinessMirrorBusinessMirrorTHREETIME

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

ROTARY CLUB

JOURNALISM

PESO EXCHANGE RATES ■ US 44.5180 ■ JAPAN 0.3705 ■ UK 67.4937 ■ HK 5.7439 ■ CHINA 7.1771 ■ SINGAPORE 33.4772 ■ AUSTRALIA 34.8232 ■ EU 49.9180 ■ SAUDI ARABIA 11.8721 Source: BSP (4 May 2015)

Sluggish China to hurt PHL growthBSP SAYS EFFECT OF SLOWING CHINESE ECONOMY MOST EVIDENT IN INVESTMENTS, EXPORTS

SANDIGANBAYAN DENIES CNN PHILIPPINES’S PLEATO INTERVIEW SENATORSTHE Sandiganbayan has denied

the request of television net-work CNN Philippines to inter-

view the senators, who were charged with plunder, to make sure the sub judice rule will not be violated. CNN Philippines wanted to in-terview Sen. Juan Ponce Enrile, who is under hospital arrest at the Gen-eral Hospital inside Camp Crame; and Senators Bong Revilla Jr. and Jinggoy Estrada, both detained at the Philippine National Police (PNP) Custodial Center. The three were arrested for their al-leged involvement in the pork-barrel scam using bogus non-governmental organizations operated by business-woman Janet Lim-Napoles, who is, likewise, facing plunder. In a resolution dated April 22, 2015, but was only made available to the media on Monday, Sandiganbayan Presiding Justice Amparo Cabotaje-Tang said an interview with the three senators might lead to the violation of the sub judice rule—a rule which

bars parties from discussing a pend-ing case to avoid prejudging the issue and influencing the court. On March 17, in a letter directly addressed to Tang, CNN Philippines requested that news anchor Pia Hon-tiveros be allowed to have an exclu-sive interview with the three senators for the network’s weekly political talk show, NEWS.PH. Also in its request, CNN Philippines requested that the interview be con-ducted between the months of April and May. The network said the interviews, which will be taped for later air-ing, will only focus on “updates” on the three senators’ health and on “family matters.” In its comment submitted to the court late last month, the prosecu-tion argued that, though it may be unintentional, the interview “would violate the sub judice rule” given the “political nature” of the talk show.

INSIDE

FAMILY LOVES ITS SILVER BOX

FROM DREAMTO DISASTER

NEPAL GOVT ASKS FOREIGN AID WORKERS IN CAPITAL TO LEAVE, RETURN HOME

S. KOREA FIRES WARNING SHOT TO JAPAN: WE’REWATCHING YENWON

Life Tuesday, May 5, 2015 D1

Life BusinessMirror

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

DEAR Lord, the unbelieving Thomas has a numerous descent. He is a contemporary of numerous descent. He is a contemporary of every generation. Especially in our days, the every generation. Especially in our days, the

only valid proof of the resurrection people are prepared only valid proof of the resurrection people are prepared to consider in our life is our witnessing to our Christian to consider in our life is our witnessing to our Christian faith. It is through our lives, more than our words, that we faith. It is through our lives, more than our words, that we can show that You are really risen from death and is now can show that You are really risen from death and is now alive. It is through the way we live that we can show that alive. It is through the way we live that we can show that we believe in You and Your resurrection, even though we we believe in You and Your resurrection, even though we never saw You with our physical eyes. May we continue never saw You with our physical eyes. May we continue to live Jesus in our hearts forever. Amen.

� e unbelieving � omas

EXPLORING GOD’S WORD, FR. SAL PUTZU, SDB AND LOUIE M. LACSONEXPLORING GOD’S WORD, FR. SAL PUTZU, SDB AND LOUIE M. LACSONWord&Life Publications • teacherlouie1965@yahoo.comteacherlouie1965@yahoo.com

‘AVENGERS:AGE OF ULTRON’

SOARS TO SECOND-BIGGEST BOX-OFFICE

DEBUT EVER »D3

WITH the demand for affordable housing on the rise, developers are maximizing available floor space in condominium developments to the smallest possible liveable area. These days, it’s not uncommon for some units to be as small as 18 sq m, making it nothing short of cramped quarters even for a starting couple.

Of course, some wise man has said that, to every problem, there’s a solution—and, as far as cramped spaces go, ErgoHome has come up with original lifestyle solutions to customize any space according to one’s needs.

Says company President and CEO PhilipKC Ng, “ErgoHome enters the landscape with the ErgoSpace home furniture line that will expand your small living room into a dining room, and/or a bedroom seamlessly in seconds, all within thesame area. This seamless conversion is accomplished through our transformable space-saving modern furniture.”

According to Ng, it took ErgoHome three years to perfect the design for its multifunction furniture, especially in devising the right mechanism that is safe and easy to operate to make such transformation possible.

From beds that can be easily tucked away in cabinets, ErgoHome—which has showrooms in SM Mall of Asia, SM Megamall, SM City Cebu and SM City Davao and, soon, SM Aura—also has collapsible workstations that are attached to shelving units, an entire kitchen work area and cupboard hidden inside a cabinet, even a dining table that materializes magically from the floor. “You can expand your space to as much three times easily with just the right furniture,” he says.

For example, the so-called Tatami Room featured here can be fashioned from a 14-sq-m condo unit, with a variety of living spaces readily carved out by a couple of handy furnishing units.

To provide needed storage space, the floor is raised by about a feet from the floor. The steps leading into room hide drawers where things can be stored. More space is available under the floorboards. A vacuum pull is used to open the wooden panel to expose additional storage.

The shelving unit on the side of the room hides a folding bed. To reveal the bed, all you need is to simply push a button and the bed panel slowly goes down. In case of a brownout, you can easily disconnect the motor from a side of the shelving unit to be able to manually pull down the bed.

Come dinnertime, a push of another button raises a panel from the floor to reveal a Japanese-style dining area. After a meal, you can easily hide the table in the same fashion. Hidden from sight, the table becomes part of the living room area.

The shelving unit at the end of the room serves as a window seat. It can also be constructed in such a way to hide a flatscreen LED TV that can be revealed or hidden, again with the push of a button.

To provide added value to clients, ErgoHome offers free professional consultation and 3D model design to enable the condo dweller to customize and visualize his space into a dream unit before it is actually made. Even better, because such seamless transformation of space can’t be your usual DIY project, the company provides free delivery and installation to take away the stress of having to assemble and fit everything by yourself.

Now, who says you have lived like a bat when you embrace the condo lifestyle?

B R TThe Seattle Times

IT’S a contemporary box of a house, shiny bright with silver shingles sitting right next to Interstate 90. Some call it “the Lego House.”

Let’s go inside.“We used to live in the flight path in the Des

Moines area, so I-90 is nothing,” Jeremy Jensen says, quite cheerful about the whole thing. But, he adds, “I guess there are drawbacks. One thing is, you can’t have a party in the backyard.”

Jeremy is packed onto the living room sofa with his family, wife Carmen and their daughters Aja, Anna and Liv. The girls squiggle as their parents share their passion for the modern home they found in 2006 built upon an “orphan lot,” a home architect Frank Lawhead built for himself. (Lawhead reports that in 1988 it was one of the least expensive lots in King County.) A home defined and pierced by a two-story lightwell rendering freeway-side windows needless. It warms and brightens almost the entire home, particularly the kitchen, which appears to always have the lights on.

“This isn’t like a tech type of house,” Jeremy says of his family’s efforts here. “This is the family pitching in.” (They made the concrete kitchen counters in the garage. A floor-sanding effort, however, ended with a call to a professional.) Jeremy is a committed fan of contemporary architecture. It’s his baseball. Years ago, in fact, he wanted to find a lot and build a prefabricated home (now all the rage).

“But we would have had to do a teardown or be in a swamp. And we wanted to be in kidville.” Carmen appreciates her husband’s passion for modern design: “It’s all about functionality, about making things work,” she says. “I like functionality. I like not having too much space.”

Kidville, meanwhile, is what you don’t see from the freeway. Lake Sammamish is down the street. “The schools are awesome,” Jeremy says. “The kids can ride their bikes in the park. It’s such a cool neighborhood.”

The way he looks at it, the whole thing is win-win.Meanwhile, what you can see from the freeway is

the latest work on the house: The reflective aluminum shingles. “Every modern home has to become new again. Ours was tired,” Jeremy says of the original water-damaged cedar. He wanted to replace it with something

different, really different.Flipping through a magazine, Jeremy found Reinke

Shakes. Made in Hebron, Nebraska, the web site announces that “proud owners of geodesic dome homes have called them the ‘Cadillac’ of dome roofing.” The aluminum is 99-percent recycled, radiates heat (Energy Star approved) and serves for 50-plus years. The Jensens’ contractor, the folks at WestCoast Contracting, had never seen such a thing. They worked out a pattern on the ground before affixing them to the home. “It was like piecing a quilt together,” Carmen says. “They totally figured it out. It was awesome.”

In the future, Jeremy sees a shipping container put to use in the backyard (“I think it’d be fun!”), a new fence, “definitely horizontal.” The Jensens like to mix it up like that. “Anything can be changed and made better. Every once in a while we say, ‘What’s working and what’s not working?’” Carmen says.

“When people don’t like what you’ve done they don’t say anything,” Jeremy adds. “But they say to us, ‘I don’t like your house, but I really like what you’ve done with it. Let us know if you’re going to sell it.’ ”

They are not. The girls, in fact, want it for their own: “They debate who gets it when we die,” Jeremy says. ■

Small space?Big ideas

FAMILY LOVES ITS

SILVER BOX OF

A HOUSE NEXT

TO THE FREEWAY

❶ THE lightwell casts a glow on the kitchen and dining room, made even brighter with an accent wall the color of the sunniest sunflower. The Jensens replaced some of the kitchen cabinets and hardware. New cabinets are from Ikea. BENJAMIN BENSCHNEIDER/THE SEATTLE TIMES/TNS

❷ CARMENappreciates her husband’s passion for design. She likes the functionality of modern design. “It’s all about stripping stuff away,” she says. The painting is by Jeremy’s sister, Jennifer Jensen Mohanty. Behind this wall is a storage room, furnace room and the garage, a buffer between family and freeway.

❸ JEREMY JENSEN is a fan of contemporary architecture. His family’s living room, open to two stories, is cozy for two and a good book, and also roomy enough for the girls to practice Scottish Highland dancing.

❶ ❷

❸

THE so-called Tatami Room can be fashioned from a 14-square-meter condo unit, with a variety of living spaces readily carved out by a couple of handy furnishing units.

B B DLos Angeles Times

LAS VEGAS—The morning after the fight here became yuck-it-up time. The legendary P.T. Barnum line seemed a perfect fit: There is a sucker born every minute. Included in those suckers were the 16,507 who filled the MGM Grand Garden Arena, generating a paid gate of $74

million, all to watch Floyd Mayweather Jr. outbox Manny Pacquiao in a fight about as compelling as jam-packed freeway at 8 a.m. Also right there in Barnum’s pocket were the millions who paid $100 to watch on TV, and the media hordes that encouraged them to do so.

This was billed the Fight of the Century. As the Wall Street Journal so aptly put it, it’s good that we have 85 years left to top it.

There was a serious and significant side to what took place on Saturday night. Indeed, on a night that might have saved the sport, or at least improved its brand, it was only further damaged. That was not for the obvious reason of delivering a predictable and boring fight, but for the missed opportunity it presented.

More than an hour after the fight, when most sane people were asleep, Pacquiao’s team revealed, at the post-fight news conference, that their boxer had fought with a right shoulder injury.

The muscle tear reportedly occurred in early April, during a training session in the Wild Card Gym in Los Angeles, owned by Pacquiao’s trainer, Freddie Roach. The fighter’s sessions had been closed to the media and all but a handful of team members.

Roach said the injury appeared to be healing. But at one point during training, he had Pacquiao working only on left-hand-punching drills.

Pacquiao said in the news conference that he reinjured the shoulder early in the fight and was not as effective after that.

The situation got even more complicated as the news conference continued. It became a game of who knew and when did they know it.

Bob Arum, Top Rank Boxing’s chief executive and Pacquiao’s promoter, said they had sent a request for Pacquiao to be injected with painkillers for the fight. That injection would be a cocktail of three drugs, none banned, which included lidocaine. Arum said the request was sent to the Nevada State Boxing Commission a week ago.

On Saturday night at 6:08 p.m., three hours before the fight, Top Rank’s Bruce Trampler approached the commission to ask that the injection be done. The commission said no.

So Pacquiao went out, reinjured the arm, and much of the post-fight news conference furthered the impression that he fought mostly one-armed. It also included the impression that, somehow, the Nevada

commission had done him wrong.That impression was quickly clouded further when, as the news

conference was ending and reporters were filing out, commission Chairman Francisco Aguilar took the microphone to say his commission knew nothing of any injury to Pacquiao until Trampler’s request. He said had they known in a timely matter, they would have ordered an MRI to confirm the injury and allowed the injection.

All of this raises the $64,000 question, or in the case of this fight, some $640 million questions:

Why didn’t boxing postpone the fight?Why didn’t they bite the bullet, face the inevitable skepticism, and

do the right thing?Why did they take such a huge chance, knowing that an injury such

as this would reduce Pacquiao’s chances against Mayweather to near zero and further turn off a generation of fans?

Those who paid dearly to see this were already feeling their pockets picked by the yawner fight they got. Now they are told they had paid for a yawner involving damaged goods. For most, going forward, the response will be: Fool me once...but...

All this, remember, came on a night that began with several cable companies carrying the fight pay-per-view locked up near fight time with the rush for late orders. The Twitter world was filled with pictures of blank TV screens, sent by people who had already paid their $100.

Arum was questioned about the ethics of putting an injured boxer out there, and he said, “All athletes play with injuries.”

He didn’t mention that when there are millions of people not only watching, but wagering on these athletes, full disclosure is essential. That’s what the National Football League’s weekly injury report is all about.

In misfortune, there is often opportunity. Boxing had a chance to do the opposite of what it did. Instead of spoiling its brand, it could have enhanced it.

It needed to announce a postponement with a clear and constant message—along with refunds—that the sport needed to do what was right, that it would not sell a pig in a poke.

Eventually, the public anger and sarcasm would have subsided, and boxing might still have a future. Doing the right thing is always powerful, in life and in sports.

Boxing blew it. Its dream turned to disaster.Arum was about to be pressed more on this ethical issue when the

champion arrived and took over the news conference stage.Soon, Mayweather, who has nicknamed himself “Money,” was talking

about his private jet and showing reporters the $100-million check he received after the fight.

The sport of boxing, as it currently exists, was on display.

FLOYD JR.TAKES HISTAKES HIST$100M

SportsSportsSportsBusinessMirrorSportsSportsC1

SportsSports |

SportsSportsT

SportsSportsUESDAY

SportsSports, M

SportsSportsAY

SportsSports 5, 2015

SportsSportsAY

Sports 5, 2015

SportsAY

Sportsmirror_sports@yahoo.com.ph

Sportsmirror_sports@yahoo.com.ph

Sportssports@businessmirror.com.phsports@businessmirror.com.phEditor: Jun Lomibao

$100MADVANCE

L AS VEGAS—The check was for $100 million, a payday so mind boggling that Floyd Mayweather Jr. couldn’t help but show it to a few reporters when the night was done.

“No pictures, though,” Mayweather said, sliding the check out of an envelope. “Don’t want any pictures of it.”

The check will soon be cashed, adding to the millions Mayweather already has stashed in his bank accounts. It was actually just a down payment for his night’s work, which could total more than $200 million by the time pay-per-view sales total more than $200 million by the time pay-per-view sales are tallied up.

The richest fight ever wasn’t the best fight ever, but that wasn’t entirely Mayweather’s fault. He did what he usually does on Saturday night against Manny Pacquiao in a win that cemented his legacy as the best of his generation, even if he didn’t win any new fans doing it.

Still, the fight will be a tough act to follow if only because of the staggering money it brought in. Hard to imagine Mayweather fighting for a paltry $30 million or

$40 million after a night he made history with the richest single payday any athlete of any sport has made.

He says he’ll fight once more in September, then hang up the gloves. Mayweather says it’s time to enjoy the fruits of his labor from a sport that has consumed his life since he was a kid throwing punches in Grand Rapids, Michigan.

“I don’t really think I’ll miss the sport,” Mayweather “I don’t really think I’ll miss the sport,” Mayweather said. “I don’t even watch boxing. At one particular time I loved the sport of boxing. I wanted to go to every fight and wanted to be at every boxing event. But I just lost the love for the sport.”

Before a well-heeled crowd of 16,507 that cheered every time Pacquiao threw a punch, Mayweather dominated late once again to pull out a decision win that seemed closer in the ring than it did on the scorecards. Pacquiao even thought he won, though punch stats showed Mayweather landing far more punches and even throwing more than the usually frenetic Filipino.

Pacquiao would blame a shoulder injury suffered in training last month for not being able to throw more right hands. His handlers would blame Nevada boxing officials for not allowing him a shot to numb the shoulder just before the fight, though the excuse rang hollow.

“I cannot use a lot of my right hand but the fight was still good,” Pacquiao said. “What we wanted to do we couldn’t do because of my shoulder. But he’s fast, he’s a good boxer. Give the credit to him. He won tonight.”

Pacquiao’s trainer, Freddie Roach, said his fighter would like a rematch, but there is little chance of that. Not with Pacquiao’s shoulder injury, and certainly not after the perfect financial storm of a fight that cannot be replicated.

Pacquiao likely made $100 million for himself for the fight that packed the MGM Grand arena with celebrities, sports stars and people paying as much as $40,000 for ringside seats. The bout was delayed for about a half hour because pay-per-view sales were overwhelming cable and satellite systems, a good omen for the paydays of both fighters.

But while Pacquiao was the crowd favorite, Mayweather was the masterful boxer. He may not have ended the career of the remarkable career of the Filipino who once sold doughnuts on the streets to survive, but it’s doubtful Pacquiao can continue as a big pay-per-view much longer.

“I did my best, but my best wasn’t good enough,” Pacquiao said. “I fought a good fight.”

Mayweather fought a good fight, too, even if it wasn’t the crowd pleasing affair fans wanted. He used his reach advantage to land jab after jab, and was so elusive that Pacquiao was only able to land one of every five punches he threw, including only 18 of 193 right jabs.

It was another great defensive performance from a fighter who knows just what he has to do to win. Mayweather remained unbeaten in 48 fights in a career that has now stretched 19 years.

“I knew I had him from round one,” Mayweather said. “I went out there and felt him out. I wanted to see certain moves. Everything is a calculated move. I’m 10 steps ahead of any other fighter.”

If Mayweather is serious about hanging up the gloves after one more fight, he’ll go into the history books as the best of his generation—and certainly the richest. Because he doesn’t take chances and turns fights into chess matches, though, he’s not going to be mentioned on any short list of all-time greats even while he insists he’s the best ever.

Mayweather says he plans to give up all three welterweight titles he holds so other fighters have a chance at them. That will also make it easier for him to choose an opponent for a September fight that he says will be his last.

But there will be pressure to continue. Rocky Marciano’s record of 49-0 could be broken with two more fights, and the MGM is building an arena on the Las Vegas Strip that Mayweather could open next spring if he keeps fighting.

“I’m only human, I contradict myself,” Mayweather said, leaving open the possibility of more fights. “I’m not perfect.”

He wasn’t against Pacquiao. But he was good enough to pocket his $100-million check in boxing’s richest fight. AP

WITH PAC PAC P QUACQUAC IAO INJURYURYUR , BY, BY OXOXO ING HAD SHOT TO DO RIGHT THING; IT DUCKED

FROM DREAM TO DISASTER

B B MDetroit Free Press

F LOYD MAYWEATHER JR.-MANNY PACQUIAO is over. Now it’s time for the hot takes. And most hot takes have come to an agreement: Saturday night’s fight at

MGM Grand in Las Vegas didn’t live up to the enormous “Fight of the Century” hype that had built for months.

“The so-called fight of the century was pay-per-snooze, a complete waste of everyone’s time and money—except in a boxing community now rolling in obscene amounts of cash, surely in disbelief they fooled us rubes again,” For The Win’s Chris Chase wrote.

Former heavyweight boxing champion Mike Tyson tweeted: “We waited five years for that...#underwhelmed #MayPac.”

Green Bay Packers quarterback Aaron Rodgers had one word: “Underwhelming.”In case you missed it, Mayweather, a Grand Rapids native, beat Pacquiao via

unanimous decision in a welterweight title fight that many thought didn’t have enough action, and that Mayweather won by being evasive and calculating rather than meeting Pacquiao head-on and trading blows.

Either way, Mayweather improved to 48-0 in his boxing career, even if most aren’t exactly in awe about how he got there.

“To watch Floyd Mayweather box is to witness an elaborate exercise in self-preservation,” Deadspin’s Drew Magary writes. “There’s not much passion. There’s certainly not much flair. There’s just Floyd moving around, doing his best to preserve a rote decision, and preserve the potential rematch, and preserve an unbeaten record that holds more historic value to him that it does anyone else. And yes, his style works, if only in the most cynical sense.”

These reviews aren’t glowing in the first place. But considering this was supposed to be the biggest match in years for boxing, an ailing sport—and that the pay-per-view price was $89.95—that makes them even worse.

Among the biggest critics of the fight was Oscar de la Hoya, another former welterweight boxer who lost to Mayweather in 2007 via split decision.

For HBO and Showtime, however, there is a bit of good news: Estimates say that the fight will bring in about $400 million from pay-per-view revenues.

That’s staggering, even if it was a little too easy for people to watch the fight for free on Periscope, a live-streaming application.

Waste of time and money?

PROMOTER Bob Arum (left) talking with trainer Freddie Roach, requested for Manny

Pacquiao (center) to be injected with painkillers

for the fight but was denied by Nevada Boxing State

Commission. AP

FLOYD MAYWEATHER JR., is at least $100 million

richer after the fight.

B3-1 | Tuesday, May 5, 2015• Editor: Lyn Resurreccion

WorldBusinessMirror

WorldTheWorld

GREECE BAILOUT A man watches the city of Athens at Filopalous hill on April 24. O�cials say talks between Greece and its international creditors on how to stave o� bankruptcy have made headway and will continue with the aim of reaching an agreement later this month. AP/PETROS GIANNAKOURIS

BEIJING—�e head of Taiwan’s Nationalists reaffirmed the party’s

support for eventual unification with the mainland when he met on Monday with Chinese President Xi Jinping as part of continuing rapprochement between the former bitter enemies.

Nationalist Party Chairman Eric Chu, a likely presidential candidate next year, also a�rmed Taiwan’s desire to join the proposed Chinese-led Asian Infrastructure Investment Bank during the meeting in Beijing. China claims Taiwan as its own ter-

ritory and doesn’t want the island to join using a name that might imply it is an independent country.

Chu’s comments during his meeting with Xi were carried live on Hong Kong-based broadcaster Phoe-nix Television.

�e Nationalists were driven to Taiwan by Mao Zedong’s Commu-nists during the Chinese civil war in 1949, leading to decades of hostil-ity between the sides. Chu, who took over as party leader in January, is the third Nationalist chairman to visit the mainland and the �rst since 2009.

Relations between the communist-ruled mainland and the self-governing democratic island of Taiwan began to warm in the 1990s, partly out of their common opposition to Taiwan’s formal independence from China, a position advocated by the island’s Democratic Progressive Party.

Despite increasingly close econom-ic ties, the prospect of political uni�ca-tion has grown increasingly unpopular on Taiwan, especially with younger voters. Opposition to the National-ists’ pro-China policies was seen as a driver behind heavy local electoral defeats for the party last year that led to Taiwanese President Ma Ying-jeou resigning as party chairman. AP

Taiwan party leader affirms eventual Taiwan party leader affirms eventual Taiwan party leader

reunion with China

SANAA, Yemen—With helicopter gunships hovering overhead, at least 20 troops from a Saudi-led Arab co-

alition came ashore on Sunday in the southern port city of Aden on what mili-tary o�cials called a “reconnaissance” mission, as �ghting raged between Irani-an-backed Shiite rebels and forces loyal to the nation’s exiled president.

It was the �rst ground landing by coali-tion forces since the start of the Saudi-led air campaign against the rebels and their allies—forces loyal to ousted President Ali Abdullah Saleh—who have captured most of northern Yemen and marched on south-ern provinces over the past year.

In Cairo, meanwhile, Egypt, a key coali-tion member that has been named as a likely participant in any ground o�ensive in Yemen, acknowledged for the �rst time that it has deployed troops in the Gulf re-gion and the Red Sea as part of the Saudi-led coalition.

The objective of Sunday’s landing was not immediately clear, but Yemeni military o�cials said the coalition troops would

help train forces loyal to the country’s internationally recognized leader, Presi-dent Abed Rabbo Mansour Hadi, who has been in exile since he �ed Aden in March. They would also try to identify an area that could serve as a “green zone” from which Hadi and his government could operate when they return to Yemen.

At the top of that list, said the o�cials, is the al-Bureqah area west of Aden, which stretches for about 15 kilometers (about 10 miles) along the coast and is home to a ma-jor oil re�nery and large fuel tanks.

The Western-backed Hadi �ed to neighboring Saudi Arabia in March, just a few weeks after he �ed the capital, Sanaa, which was captured by the rebels, known as Houthis, last September.

Saudi o�cials declined to immediately comment on Sunday’s landing. However, military and security o�cials have repeat-edly said a ground operation would follow the Saudi-led air campaign that began on March 26, after the military capabilities of the Houthis and their allies had been suf-the Houthis and their allies had been suf-the Houthis and their allies had been suf�ciently weakened.

On Sunday the Yemeni o�cials said that streamlining the militiamen �ghting the Houthis in Aden was a key step to-ward establishing a coherent force that a coalition expedition in Aden could lend support to.

The coalition troops, who included black-clad masked men, as well as Yemeni expatriates wearing military-style shorts, landed in a central area between Aden’s neighborhood of al-Mansoura and the air-neighborhood of al-Mansoura and the air-neighborhood of al-Mansoura and the airport, said the Yemeni o�cials and witness-es reached by the Associated Press inside Aden. They said helicopter gunships hov-ered above the landing area as the troops came ashore.

The o�cials, who include a top army commander based in Aden and loyal to Hadi, spoke on condition of anonymity as they weren’t authorized to brief journal-ists. Residents who witnessed the landing also spoke on condition of anonymity for fear of reprisals.

The troops used at least four vehicles to move around Aden and included Yemenis who had been serving in the

armed forces of Gulf Arab members of the coalition and were likely serving as guides, the o�cials said.

They said the troops carried assault ri�es, took photos of the areas they toured and car-took photos of the areas they toured and car-took photos of the areas they toured and carried topography equipment. There was no precise �gure available for their number, the nationality of the non-Yemenis among them or how long they intended to stay. It was not immediately clear whether they were ferried to Aden by helicopters taking o� from coalition navy ships o� the coast of Yemen or traveled to shore in speed boats.

They landed amid a surge in coalition airstrikes against positions of the Iranian-backed Houthis and their allies in Aden, including those at the city’s airport. In Cairo late Sunday, a statement issued by Egypt’s National Defense Council said the top policy body had agreed to extend by three months the deployment of Egyptian troops for “combat missions” as part of the Saudi-led coalition to protect Arab and Egyptian interests in the Gulf region and the Red Sea, including its strategic south-ern Bab Al-Mandab entrance. AP

Arab coalition ‘reconnaissance’ troops arrive in Yemen

KATHMANDU, Nepal—NeKATHMANDU, Nepal—NeK -pal’s government urged Kpal’s government urged Kforeign rescue workers in Kforeign rescue workers in K

the quake-hit capital to return home on Monday as hundreds of people visited Buddhist shrines and monasteries to mark the birthday of Gautam Buddha.

Information Minister Minen-dra Rijal said the major rescue work in Kathmandu and surround-ing areas have been completed and that the remaining operations can be handled by local workers. How-be handled by local workers. How-be handled by local workers. However, work remained in the villages and remote mountain areas and foreign aid volunteers could work with local police and army rescuers in those areas, he said.

Since the April 25 earthquake, 4,050 rescue workers from 34 di�erent nations have �own to Nepal to help in rescue opera-tions, provide emergency medi-cal care and distribute food and other necessities. �e death toll from the quake, Nepal’s worst in more than 80 years, reached 7,276, police said.

At the Swayambhunath shrine, atop a hill overlooking Kathmandu, hundreds of people chanted prayers as they walked around the hill where the white iconic stupa with its gazing eyes are located.

Some of the structures around the stupa, built in the 5th century, were damaged in the April 25 mag-were damaged in the April 25 mag-were damaged in the April 25 magnitude-7.8 quake. Police blocked o� the steep steps to the top of the shrine, also called “Monkey tem-ple” because of the many monkeys who live on its slopes.

“I am praying for peace for the thousands of people who were killed,” said Santa Lama, a 60-year-old woman. “I hope there will be peace and calm in the country once again and the worst is over.”

Authorities had to temporarily close Kathmandu’s main airport to large aircraft delivering aid due to runaway damage on Sunday, but UN o�cials said the overall logistics situation was improving.

�e airport was built to han-dle only medium-size jetliners, but not the large military and

cargo planes that have been �ying in aid supplies, food, medicines, and rescue and humanitarian workers, said Birendra Shrestha, the manager of Tribhuwan Inter-national Airport.

�ere have been reports of cracks on the runway and other problems at the only airport ca-pable of handling jetliners.

“You’ve got one runway, and you’ve got limited handling facili-ties, and you’ve got the ongoing commercial �ights,” said Jamie McGoldrick, the UN coordina-tor for Nepal. “You put on top of that massive relief items coming in, the search and rescue teams that have clogged up this air-port. And I think once they put better systems in place, I think that will get better.”

He said the bottlenecks in aid delivery were slowly disappear-ing, and the Nepalese govern-ment eased customs and other bureaucratic hurdles on human-itarian aid following complaints from the UN. AP

NEPAL GOVT ASKS FOREIGN AID WORKERS IN CAPITAL TO LEAVE, RETURN HOME

LEBANESE children hold placards and Yemeni �ags during a demonstration organized by the Hezbollah group in protest of the Saudi-led air strikes against Yemeni Shiite rebels, known as Houthis, in front of the United Nations headquarters in Beirut, Lebanon, on April 5. Shiite rebels freed more than 300 prisoners in the southern city of Dhale, Yemeni security o�cials said, as the rebels fought pitched battles with supporters of the country’s beleaguered President Abed Rabbo Mansour Hadi in the southern port city of Aden. Arabic on the placard (center) reads, “We are all Yemen, Gulf rulers.” We are all Yemen, Gulf rulers.” W AP/BILAL HUSSEIN

LENDING 30-DAY SPECIAL SAVINGS DEPOSIT ACCOUNT

UNIVERSAL BANKS30-Apr-15 23-Apr-15 30-Apr-15 23-Apr-15

HIGH % LOW % HIGH % LOW % HIGH % LOW % HIGH % LOW %LOCAL BANKS 1. Asia United Bank 7.0000 6.2500 7.0000 6.2500 1.2500 0.6250 1.2500 0.6250 2. Banco de Oro Unibank 6.6550 4.0000 6.6550 4.0000

3. Bank of the Philippine Islands 6.6000 4.0000 6.6000 4.0000 1.0000 0.5000 1.0000 0.5000 4. China Banking Corp. 8.0000 4.2500 8.0000 4.2500

5. Development Bank of the Philippines 6.6500 4.5000 6.6500 4.5000 1.0000 0.5000 1.0000 0.5000

6. East West Bank 6.2500 4.2500 6.2500 4.2500 7. Land Bank of the Philippines 7.7033 4.7033 7.7033 4.7033 1.0000 0.2500 1.0000 0.2500 8. Metropolitan Bank and Trust Co. 7.5000 5.0000 7.5000 5.0000 9. Philippine National Bank 8.4000 7.4000 8.4000 7.4000 10. Philippine Trust Co. 7.0000 4.5000 7.0000 4.5000 0.3750 0.3750 0.3750 0.3750 11. Rizal Commercial Banking Corp. 7.7500 5.7500 7.7500 5.7500 0.6250 0.2500 0.6250 0.2500

12. Security Bank Corp. 8.4000 6.4000 8.4000 6.4000 1.2300 0.0000 1.2300 0.000013. Union Bank of the Philippines 8.5000 6.5000 8.5000 6.5000 14. United Coconut Planters Bank 7.0000 5.0000 7.0000 5.0000

AVERAGE 7.3863 5.1788 7.3863 5.1788 0.9257 0.3571 0.9257 0.3571 BRANCHES OF FOREIGN BANKS15. ANZ Bank 5.5500 2.5000 5.5500 2.5000 16. Deutsche Bank 6.2500 3.2000 6.2500 3.2000 17. Hongkong & Shanghai Banking Corp. 6.3700 2.9000 6.5000 2.7500 18. ING Bank 5.8000 3.8000 6.1000 4.1000 19. Mizuho Corporate Bank Ltd. 6.6550 1.6000 6.6550 1.6000 1.4500 1.2000 1.4500 1.2000

20. Standard Chartered Bank 4.0700 3.6000 4.0700 3.5550 AVERAGE 5.7825 2.9333 5.8542 2.9508 1.4500 1.2000 1.4500 1.2000

COMMERCIAL BANKS30-Apr-15 23-Apr-15 30-Apr-15 23-Apr-15

HIGH % LOW % HIGH % LOW % HIGH % LOW % HIGH % LOW %LOCAL BANKS21. Bank of Commerce 6.0192 3.5192 6.6154 4.1154 0.8750 0.5000 0.8750 0.5000 22. BDO Private Bank 6.6550 4.0000 6.6550 4.0000 0.3750 0.3750 0.3750 0.3750 23. Philippine Bank of Communications 7.0000 5.0000 7.0000 5.0000 24. Philippine Veterans Bank 8.5000 6.5000 8.5000 6.5000 0.7500 0.6250 0.7500 0.6250 25. Robinsons Bank Corp. 8.0000 5.2500 8.0000 5.2500 1.1250 0.3750 1.1250 0.3750

AVERAGE 7.2348 4.8538 7.3541 4.9731 0.7813 0.4688 0.7813 0.4688 BRANCHES OF FOREIGN BANKS26. Bangkok Bank 7.6500 4.8000 7.6500 4.8000 27. Bank of America 6.6550 4.6550 6.6550 4.6550 28. Bank of China 6.0000 3.0000 6.0000 3.0000 29. Bank of Tokyo-Mitsubishi 5.7500 3.7500 5.7500 3.7500 1.7500 0.5000 1.7500 0.5000 30. Citibank, N.A. 6.5500 3.5500 4.0800 2.8700 31. JPMorgan Chase Bank 3.7300 3.7300 3.7300 3.7300 32. Korea Exchange Bank 8.0000 4.5000 8.0000 4.5000 33. Mega Int'l. Commercial Bank Co. Ltd. 8.2500 4.0000 8.2500 4.0000

AVERAGE 6.5731 3.9981 6.2644 3.9131 1.7500 0.5000 1.7500 0.5000 SUBSIDIARIES OF FOREIGN BANKS34. Chinatrust Bank 5.7000 4.7000 5.9870 4.9870 35. Maybank 7.0000 6.0000 7.0000 6.0000 1.0000 0.6000 1.0000 0.6000

AVERAGE 6.3500 5.3500 6.4935 5.4935 1.0000 0.6000 1.0000 0.6000 GENERAL AVERAGE 6.8446 4.4874 6.8116 4.4962 0.9861 0.4768 0.9861 0.4768

RATES

Banking&Finance BusinessMirror

Banking&Finance BusinessMirror

Banking&Finance banking@businessmirror.com.phTuesday, May 5, 2015B2-2

“Korean companies face bigger difficulties this year than last,” said Song In Chang, the ministry’s director general in charge of foreign exchange market policies. “What’s different is that we have been paying

attention to the won-yen rate since last year, whereas the won-dollar was our main focus before that.”

The currency’s gains against the euro have also caught Song’s atten-tion, he said in an interview at Se-

jong, south of Seoul, on April 30.The won is at its strongest level

against the yen and the euro since at least 2008, putting pressure on exports that have fallen for four straight months this year, the longest streak since 2009. Companies from Hyundai Motor Co. to LG Electron-ics Co. and Samsung Electronics Co. reported earnings last month that declined from a year ago and all three said the currency’s strength contrib-uted to the results.

The won fell 0.8 percent to 1,080.82 per dollar as of 10:47 a.m. in Seoul today, from Thursday’s close of 1,072.29, according to data compiled by Bloomberg. Markets

were closed in Seoul on Friday. The won fell 0.2 percent against the yen.

The yield on South Korean gov-ernment notes due December 2017 rose 5 basis points to 1.89 percent, the highest since March 12, Korea Exchange prices show.

Song said that while the govern-ment doesn’t target any specific level for the won, it could “fine-tune” movements to ease any “herd behav-ior” in the currency. The won has gained about 40 percent against the yen since Japanese Prime Minister Shinzo Abe took office in late 2012.

It’s up about 17 percent versus the euro and little changed against the dollar over the same period,

according to data compiled by Bloomberg.

“Last year the won’s declines against the dollar offset the impact from the gains against the yen, but this is no longer the case,” Song, 53, said. Still, South Korea has no inten-tion of intervening in the currency market for the sake of exporting companies, Song said.

Hyundai Motor cited weakening cited weakening citedof the euro and other emerging-market currencies for profit declines in the first quarter. LG Electronics last week said its first quarter sales growth was marginal due to negative currency impact.

That’s a notable contrast to Toy-

ota Motor Corp., Japan’s biggest company, which is forecasting  a second-straight record annual profit record annual profit recordas it benefits from a weaker yen.

South Korea’s trade ministry said on May 1 that the weakening of the yen and the euro has hurt exporters from carmakers to ma-chinery manufacturers. Shipments to Japan fell 12.6 percent in April from a year earlier, while exports to Europe dropped 11.9 percent.

Separately, Song said the govern-ment may sell yuan-denominated bonds for the first time. “We may issue if we need to set benchmark costs for local companies,” Song said, without giving further details.

CHINA’A’A S stocks rose the most in a week, led by property and power companies, amid

signs the real-estate market is sta-bilizing and speculation grew the government will add to monetary stimulus after a manufacturing gauge weakened.

The Shanghai property index climbed to a record high after Sou-fun Holdings Ltd. data showed home prices climbed in Beijing and Shanghai. Huaneng Power Interna-tional, the biggest Chinese utility, soared 10 percent as Qinhuangdao coal prices slumped to a nine-year low. The final Purchasing Managers’ Index (PMI) from HSBC Holdings Plc. and Markit Economics was at 48.9, missing analysts’ estimates and signaling a contraction.

The Shanghai Composite Index climbed 0.9 percent to 4,480.47 at the close. The gauge advanced 19 percent in April, the third-straight monthly gain, on expectations the government will reduce borrowing costs after cutting interest rates and reserve-requirements ratios twice each since November.

“The market is expecting some cut in interest rates or reserve-requirement ratios soon given the poor situation in the economy,” said Wu Kan, a money manager at Drag-on Life Insurance Co. in Shanghai, which oversees about $3.3 billion. “The market will meet more resis-tance as it moves up. It’s growing more likely that the market will have wild fluctuations.”

The CSI 300 Index advanced 0.8 percent. Hong Kong’s Hang Seng China Enterprises Index gained 0.4 percent, while the Hang Seng Index added 0.1 percent. Markets in China and Hong Kong were closed on Friday for a holiday. The Bloom-berg China-US Equity Index added 0.5 percent in New York on Friday.

PMI data contrasts with the offi-cial manufacturing PMI for April that suggested a stabilization. The official manufacturing PMI was at 50.1, compared with the median es-timate of 50.

“China’s authorities are becoming more concerned about the economic downturn,” Wang Tao, chief China economist at UBS Group AG in Hong Kong, wrote in a note on Monday. “In the next couple of months, we expect the government to speed up infrastructure investment with en-hanced support from policy banks and cut the benchmark interest rate.”

The Communist Party leader-ship has vowed to step up targeted controls to counter downward pres-sure on the economy, avoiding any mention of full-blown stimulus.

China’s economic growth in the first quarter conformed to expec-tations, the official Xinhua News Agency reported, citing a Politbu-ro meeting on Thursday at which President Xi Jinping presided. The nation will “fine-tune” its policies and maintain continuity and sta-bility, Xinhua said.

A gauge of property developers in Shanghai climbed 3.4 percent for the steepest gain among five industry groups. China State Con-struction Engineering Corp. rallied 10 percent. Evergrande Real Estate Group Ltd. jumped 7.1 percent in Hong Kong.

Beijing home prices rose 0.4 percent in April from the previ-ous month, while those in Shang-hai added 0.3 percent, Soufun, owner of China’s biggest real-es-tate information site, said. New home sales in Shanghai jumped 59 percent last month, according to property consultant Shanghai UWin Real Estate Information Services Co. The property mar-ket is stabilizing with improving

analysts, led by Oscar Choi wrote in a note. Prices and volumes may see an uptrend, they wrote.

A measure of utilities in the CSI 300 surged 7.2 percent to a seven-year high. Huadian Power Interna-tional Corp. and GD Power Develop-ment Co. both soared by the daily limit of 10 percent.

Chinese power-station coal prices slid for a 10th straight week to the lowest level since October 2006, according to data from the China Coal Transport and Distri-bution Association.

Twenty-five companies are scheduled to sell initial public of-fering shares from today through May 11, which may freeze 2.34 trillion yuan ($376 billion) based on the median estimate of eight brokerages surveyed by Bloomberg. Margin traders increased holdings of shares purchased with borrowed money on Thursday, with the out-standing balance of margin debt on the Shanghai Stock Exchange rising to a record 1.22 trillion yuan.

The Shanghai Composite is valued at 17.4 times 12-month projected earnings, compared with the five-year average multiple of 10.2, accord-ing to data compiled by Bloomberg.

An unprecedented amount of money is flowing into the largest exchange-traded funds (ETFs) that track Chinese companies listed in Hong Kong as investors bet on the biggest rally in more than three years will continue.

The Hang Seng H-Share Index Fund lured HK$20.5 billion in April, the largest monthly inflow since at least 2010 and the third-most among equity ETFs glob-ally, according to data compiled by Bloomberg. About HK$29 billion has been added to the fund during the past four months in the longest stretch since 2013 as assets grew to

GREECE is still far from an agreement with its inter-national creditors as Prime

Minister Alexis Tsipras tries to per-suade officials to ease the flow of liquidity to the country.

Three days before the European Central Bank’s (ECB) next decision on emergency aid, gaps remain on issues ranging from fiscal forecasts to labor and pension reforms, three people familiar with the talks said. Still, progress has been made in an improved atmosphere and Greece should have the cash to make a €200-million ($223-million) pay-ment to the International Mon-etary Fund (IMF) this week, of-ficials said.

The fiscal noose is tightening on Greece after weeks of brinkman-ship and Tsipras needs to show European officials that he’s willing to find a compromise. Failure to do so could prompt the ECB to raise the haircut it demands on Greek collateral as soon as May 6, a deci-sion which would risk pushing the country further toward financial chaos and capital controls.

A Greek official said the gov-ernment is targeting a successful

conclusion of this stage of talks by Wednesday, which the country hopes will be enough for the ECB to relax, rather than tighten, li-quidity conditions.

Beyond that, Greece wants to reach a broader, technical agree-ment with creditors this month. International officials stressed there’s a long way to go, despite the recent progress. All the people involved spoke on condition of anonymity as the talks are con-fidential. Negotiations resumed on Sunday.

Greek government bonds rose slightly early Monday, with the yield on the two-year bond falling 36 basis points to 19.42 percent.

The key date this week will be the ECB Governing Council’s meet-ing on May 6. The central bank’s stance will depend on the progress achieved this week, one of the peo-ple said, adding that restrictions on Greek banks can only be eased once it’s absolutely clear that bail-out funding will resume.

Investor optimism that a deal to unlock financial aid for Greece is close after months of talks put the country’s assets among the

region’s best performers in April. Greece is also signaling it’s opti-mistic it will meet all its IMF obli-gations this month, even if there’s no agreement with creditors. In addition to this week’s payment, Greece also faces a €770-million payment on May 12.

“We will have the cash,” Greek Labor Minister Panos Skourletis said in an interview on Monday with Mega TV Channel.

Nevertheless, there are signs of dissent within Tsipras’s govern-ment with some officials, including Finance Minister Yanis Varoufakis, stressing their opposition to pen-sion cuts or a sales tax increase.

“We will not implement any measures which would lead to pension cuts this year,” Skourletis said. He also said the government will abolish this year a controver-sial real estate tax and replace it with a different property tax.

While the government is working hard to get a deal as soon as possible, it will draw the line on matters such as labor market reforms and cuts to wages and pensions, Greek govern-ment spokesman Gabriel Sakellari-dis added.

S. Korea fires warning shot to Japan: We’re watching yen-won

SOUTH Korea’s top currency of- Korea’s top currency of- Korea’s top currency official fired a warning to Japan: his nation has stepped up scrutiny of

the yen’s tumble against the won after damage to exporter earnings.

Greece targets May deal as breakthrough remains elusive

China stocks rise most in week as developers, utilities jump

TRADERS and economists are the most united they’ve been this year that central bank

Governor Glenn Stevens needs to cut rates on Tuesday in the face of a stronger currency.

The market is pricing in a better than 75-percent chance borrowing costs will fall to a fresh record of 2 percent and 25 of 29 economists also predicted a quarter-point reduction.

Galvanizing the forecasts is a rebounding currency hovering at 78 US cents and a stalled recov-ery in the price for iron ore that underpins export earnings. Poli-cy-makers also face the risk that firms outside of mining that were supposed to pick up  the slack in the economy will actually reduce investment in an economy grow-ing below it’s potential.

“The recent surge in the Austra-lian dollar would be viewed quite dimly by the folks at the Reserve Bank,” said Bill Evans, chief econ-omist at Westpac Banking Corp. Failing to cut rates “in the face of such strong market pricing will affect the bank’s credibility over time,” he added.

Tuesday’s decision also dovetails

with the release of the Reserve Bank of Australia’s updated quarterly forecasts this week, which the board will see at the policy meeting but which won’t be released publicly un-til May 8. In February, when Stevens cut the cash rate for the first time in 18 months, he cited the downgrade in growth forecasts in that month’s Statement on Monetary Policy.

The RBA has shown a preference for moving in the same month that it releases quarterly forecasts, Evans said. The last three cuts dovetailed with such updates and the same is true for more than half the moves made since Stevens became gover-nor in September 2006, data com-piled by Bloomberg show.

Australia’s central bank also prefers to see the latest consumer price readings before moving. Core inflation remains at the lower end of the RBA’s 2-percent to 3-percent annual target and the CPI rose closer to 1 percent on a year-on-year basis, data last month showed.

The Australian dollar has jumped more than 3 percent since the RBA’s April 7 policy meeting, when it wrong-footed market rate-cut expec-tations, and was the best-performing

major currency outside the Norwe-gian Krone and Brazilian Real over the same period. The Aussie was at 78.20 cents at 12:22 p.m. in Sydney.

Government data last month showed the unemployment rate un-expectedly fell  to 6.1 percent, as the economy added 37,700 jobs in March, more than double the num-ber of positions predicted by econ-omists. Sydney home prices also climbed 14.5 percent in April from a year earlier as buyers responded to record-low borrowing costs.

The RBA is trying to encourage growth in services, manufacturing and retailing to offset the decline in mining investment that helped drive the past decade of Australia’s 24 years of growth. It’s had to cut rates to off-set a currency that’s been propped up by funds seeking higher yields as counterparts in Europe, Japan and the US pursue quantitative easing.

The outlook for Australia’s key trading partner, China, remains clouded as growth slows in the world’s second-largest economy. A Chinese manufacturing gauge released on Monday trailed econo-mists’ estimates in April as new orders declined.

RBA rate-cut call galvanized by Aussie hovering at 78 US cents

LIFE D1

SPORTS C1

WORLD B31

BANKING & FINANCE B22

Timta, RFI could cost P-Noy business support

SPECIAL REPORT

ADVOCATING GOOD GOVERNANCE Institute for Solidarity in Asia (ISA) Chairman Dr. Jesus P. Estanislao (left) leads the ISA’s Public Governance forum, which aims to showcase the results of its partner-organizations’ efforts in developing and implementing their respective good-governance initiatives. Also in the photo are (from left) Butuan City Mayor Ferdinand M. Amante Jr., MD; National Competitiveness Council Private Sector Cochairman Guillermo Cruz; and Philippine Air Force Spokesman Col. Enrico B. Canaya. ALYSA SALEN

C A

S “S C,” A

C A

vice president of the ECCP. Japanese Chamber of Commerce and Industry Vice President Nobuo Fujii made the same statement in February during the visit of the largest Japanese business delegation to the Philippines since the 1990s. The JFC said Timta will “hamper the exercise and operations of IPAs, in view of the rigid government budgetary processes in the passage of the appro-priation law, as well as the actual implementation of this system.” Local business groups echoed their foreign counterparts. The Management Association of the Philippines (MAP) is scoring the stringent policy that the DOF wants in carrying out the Timta, deeming the forfeiture of incentives in the case of noncompliance, as a “harsh and con-fiscatory” measure. Makati Business Club (MBC) Executive Direc-tor Peter Perfecto, in an e-mail interview, warned that removing the ITH under the RFI bill could have repercussions on the country’s competitive-ness in light of the forthcoming Asean integra-tion by the end of the year. “We maintain that administering incentives require some rationalization efforts, including defining roles and functions of the different IPAs and regulatory bodies and addressing some outdated laws. However, in a period of stiff com-petition, especially with the Asean Economic Community where all our neighbors, everyone, offer ITH; removing ITH altogether will certainly put us at a disadvantage,” Perfecto said. On the Timta, the MAP said the transparency measure should not entail stringent penalties from the monitoring body, which, in the measure,

would be the Bureau of Internal Revenue. “This is just an information tool, the penalty for imperfect compliance should not be forfeiture of incentives for the registered enterprise,” said Francisco “Popoy” Filamor del Rosario Jr., presi-dent of MAP, via an e-mail interview. The MBC expressed a similar sentiment in the provision of the Timta in the House of Represen-tatives for a Tax Expenditure Account (TEA). The fund has been a point of dispute between the DOF and the Department of Trade and Indus-try (DTI), as the TEA requirement would not just serve as a report of all the incentives given to enterprises in a year, as reflected in the General Appropriations Act. The TEA, as part of the bud-get, would also require IPAs to forecast how much incentives they will give for the incoming year—

an impossible task, according to a DTI official, as the incentives are derived from the income of a company netted in the following year. The requirement would essentially put a cap on the amount of incentives they can give, as the DTI’s hands would be tied when its forecast falls short of the actual incentives enterprises are entitled to. “Implementing a cap on incentives may be-come an obstacle to investment. How do we define the cap? What if there are more oppor-tunities for investments but the budget has al-ready been used up? We need to consider the repercussions very carefully considering that we are competing with our Asean neighbors,” Perfecto added. To be continued

Catherine N. Pillas, Jovee Marie N. dela Cruz

Total Approved Investments 2010-2014 (Jan – Sep) per IPA (in billions of Php) ; Source: nscb.gov.ph

Projected Employment from 2010 – 2014 (Jan-Sep) per IPA ; Source: nscb.gov.ph

0

50

100

150

200

250

300

350

400

450

500

2010 2011 2012 2013 2014 (Jan-Sep)

BOI

PEZA

CDC, AFAB,BOI-ARMM, SBMA

0

50,000

100,000

150,000

200,000

250,000

2010 2011 2012 2013 2014 (Jan -Sep)

CDC, BOI-ARMM, SBMA, AFAB

PEZA

BOI

Tuesday, May 5, 2015A2

Continued from A1

BMReportsBusinessMirror www.businessmirror.com.ph

Timta, RFI could cost P-Noy business supportInvestment Promotion

Agency

2010 2011 2012 2013 2014 (as of 3RD Quarter)

Board of Investments

Investment 302.1 368.9 360.3 466 112.6 Employment 36,751 67,211 45,184 38,100 38,183

Philippine Economic Zone Authority

Investment 204.4 193.6 311.9 276.1 41.2 Employment 84,340 109,527 89,289 109,914 87,475

Clark Development Corporation

Investments : 36.1 Employment: 13,443

Investments: 89.5 Employment: 17,459

Investments: 25 Employment: 12,143

Investments: 11.9 Employment: 13,984

Investments: 5.8 Employment: 96,272

Board of Investments – ARMM

Authority of the Freeport of Bataan

Subic Bay Metropolitan Authority

Total Investments

542.6 746.8 697.7 754 159.6

Total Employment

134,534 194,197 146,616 161,998 221,930

Total Approved Investments 2010-2014 (Jan – Sep) per IPA (in billions of Php) ; Source: nscb.gov.ph

Projected Employment from 2010 – 2014 (Jan-Sep) per IPA ; Source: nscb.gov.ph

0

50

100

150

200

250

300

350

400

450

500

2010 2011 2012 2013 2014 (Jan-Sep)

BOI

PEZA

CDC, AFAB,BOI-ARMM, SBMA

0

50,000

100,000

150,000

200,000

250,000

2010 2011 2012 2013 2014 (Jan -Sep)

CDC, BOI-ARMM, SBMA, AFAB

PEZA

BOI

P RESIDENT Aquino signed the appointment papers of Dean Andres D. Bautista as new

chairman of the Commission on Elections and two other new Com-elec commissioners on Tuesday last week but the Palace announced it only on Monday. Also appointed to fill up remain-ing vacant seats in the commission were: Rowena Amelia V. Guanzon vice Lucenito Tagle and Sheriff M. Abas vice Elias Yusoph, for terms to expire on February 2, 2022, along with that of Bautista. Palace Deputy Spokesman Abigail Valte, in a text message to Palace re-porters, confirmed on Monday that

all three appointments were signed on April 28, but that it took nearly a week to “process” their papers. “We only announced after the papers are processed,” Valte said, adding “it is not unusualthat there is a lag.” The latest Aquino appointees to key posts in the Comelec are to be submitted shortly to Congress, which reconvened sessions also, for confir-mation hearings. The three Comelec nominees are expected to undergo further scrutiny before the Congressional Commis-sion on Appointments, as the poll body gears up for the 2016 national and local elections. Butch Fernandez

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Tuesday, May 5, 2015 A3BusinessMirrorThe Nation

THE National Police said on Monday that it will intensify the campaign against crime.

The campaign is implemented through the “Oplan [operation plan] Lambat Sibat” ordered by Interior Secretary Manuel A Roxas II. Sr. Supt. Bartolome Tobias, Na-tional Police spokesman, said part of the program was the accurate re-cording of crimes reported so that the command could identify what areas need more resources. Tobias said the accurate reporting project mandates the implementa-tion of the Electronic Crime Incident Reporting System (e-CIRS), that is being started with police precincts under the National Capital Region police command. The e-CIRS should enhance the integrated database system and upgrade the National Police’s inves-tigative equipment in order to give timely, fast and reliable information of criminals, enhancing the solution of criminal cases. Pilot testing of the project was re-cently conducted at the Quezon City Police District, that has 21 precincts, with the training of some 20 desk of-ficers to administrate the system. The Metro Manila police com-mand procured almost 177 comput-

ers for e-CIRS for P8.5 million for the use of 160 police precincts all over the metropolis. Deputy Director General Leon-ardo Espina, National Police officer in charge, said the implementation of e-CIRS will ensure the gathering and inclusion of all crime data that are reported in the police station into the said database. “The e-CIRS is very important to both the reporting citizen and to us in the police,” he said. The e-CIRS was launched in Sep-tember 2011 and serves as a more efficient electronic blotter system for recording crime incidents. Espina said the system does not only facilitate crime documentation and modernize data storage, but also presents a quick, fast and reliable transmission of crime information from a police station to the provin-cial and regional offices and to the national headquarters. With the installation of the e-CIRS designed as a stand-alone system, all police stations will now report the actual situation on the ground, which is vital in mapping out strategies for quick response and crime solution which is ex-pected to be installed in all police stations nationwide.

THE Philippine Red Cross (PRC) has expressed grati-tude to the Nepal government

and a United States rescue group for saving two Filipino mountaineers trapped on Nepal’s Mount Manaslu after a 7.9-magnitude earthquake hit Nepal on April 25. PRC Chairman Richard J. Gor-don identified the two Filipinos as Mendel de la Cuesta and Edward Sampelo, who were stranded atop Mount Manaslu, the eighth tall-est mountain in world, days after the tremblor. “I would like to thank members of the Nepal government and the US rescue group who airlifted these two Filipino mountaineers trapped on Mount Manaslu namely, Mendel de la Cuesta and Edward Sampelo,” Gordon said in a statement. He disclosed that the two are now being accommodated by the PRC Team in the established PRC base at Hotel Platinum in Kathmandu. Last week the PRC sent two teams to provide assistance in quake-hit Nepal. The first team deployed was a 13-man search and rescue team from the PRC Emergency Response Unit. It is assisting the Nepal Red Cross Society in the search and rescue and retrieval of trapped victims from col-lapsed structures. All of the team members are highly trained and experienced

on collapsed structure search and rescue and urban search and res-cue. The team members are also trained and experienced emer-gency medical technicians and firefighters. The PRC also sent a medical team composed of two volun-teer doctors from Makati Medi-cal Center and three volunteer nurses from PRC chapters. The team joined the contingent from the Canadian Red Cross that set up an emergency field hospital to provide emergency medical care to the vulnerable population affected by the earthquake since hospitals in Nepal are overwhelmed by the volume of patients. The medical team from the Phil-ippines was instructed to concen-trate on providing maternal and child health care, with capability to provide surgical operations. Members of the Philippine team are highly trained and have been previously deployed in other op-erations, such as in the aftermath of Typhoon Yolanda. The PRC is set to deploy a third team of volunteers, which will make this the largest ever delegation of Filipino Red Cross volunteers to work in concord to assist in the rescue, provision of water and sanitation to prevent outbreak of diseases, as well as psychosocial support. Claudeth Mocon-Ciriaco

Natl Police boosts anti-crime drive

PRC thanks Nepal, US group for saving 2 Pinoy mountaineers

Aquino names Comelecchairman, other officials

THE independent review panel (IRP) constituted by the Brit-ish School of Manila (BSM)

following the death of one of its students has repudiated its role in writing the report released by the school’s council of trustees. The members of the IRP are Ed Chua, chairman of the Shell Companies in the Philippines; Steve DeKrey, president of the Asian Institute of Management; William Parker, school support and evaluation officer, Council of Inter-national Schools; Ulan Sarmiento III, dean of the San Beda Alabang School of Law; and Rochelle Dakanay Galano, a law professor at San Beda. “That was not our report as written and it should not be attributed solely to us. We are issuing this statement as we have been approached by a number of parents who have children at BSM, thanking us for the work we have done but also asking if the released report is the same as our report,” Chua said in a statement on behalf of the IRP.

The report was released to the BSM community by Simon Bewlay, ex of-ficio member of the BSM council of trustees and chairman of the board of governors. Chua said that when the IRP sought clarification on why the released report was edited and abridged, the explanation given was that the council of trustees chose to use the IRP report as one of several inputs and modified the report for purposes of clarity. However, the IRP believes that the authorship of the released report is mis-leading. The heading on the released report states that it is only sponsored by the Council of Trustees and lists the members of the IRP in a manner that implies their sole authorship. “It does not cite the report’s final editors or its other sources. These points, taken together, would give the misleading impression that it is the re-port of the IRP as originally written,” the IRP report said.

Independent panel repudiates report released by BSM

Mayor Midpantao Midtimbang of Guindulungan, Maguindanao, confirmed Usman’s death, along with Sr. Supt. Nickson Muksan, Maguindanao police command-er, and Barangay Muti Chairman Gayak Midtimbang. Muksan claimed that Usman’s body was taken by relatives and possibly buried since Islamic law requires that the dead be interred within 24 hours. Other reports said the body was brought to a camp of the Moro Islamic Liberation Front (MILF) for documentation. Questions swirled early Monday, with Bayan Muna lawmakers asking whether there was ironclad guaran-tee that Usman, indeed, was killed. If Usman were indeed killed, the administration could use the inci-dent to force members of the Lower House to support the enactment into law of the Bangsamoro basic law (BBL) that had been promised to the MILF by the government peace adviser Ging Deles and peace panel chief Miriam Coronel Ferrer, a law-maker said.

However, only one thing is sure about the matter, stressed skeptics from the Bureau of Internal Reve-nue: “Once confirmed, the guys who did Usman in will get the bounty of $1 million from the US govern-ment, tax-free.” As this developed, Malacañang officials are avoiding premature hoopla over reports that Usman had been killed by government troops. Asked about government efforts to verify Usman’s identity through a deoxyribonucleic acid (DNA) test, Palace Communications Secretary Herminio B. Coloma Jr. said “due diligence” is being conducted. “Magsasagawa po tayo ng due diligence hinggil diyan,” Coloma told Palace reporters. “Naaalala niyo na doon sa kaso ni Marwan, bagamat tiyak na tiyak na iyong mga PNP-SAF [Philippine National Police-Special Action Force] na talagang ang na-neutralize nila ay si Marwan, nag-extra step pa rin po na magkaroon ng DNA confirmation.” Coloma assured that the gov-ernment will take all steps neces-sary to ascertain the identity of

the slain suspect. Coloma, however, could not say if authorities cut any part of Usman’s body, as SAF commandos who killed Marwan did, cutting a finger for DNA testing, believed to be a condition for collecting the huge bounty offered for both Marwan and Usman. At least 44 SAF commandos, 18 Moro rebels and five civilians died in that January 25 encounter, now known as the Mamasapano Massacre.

DoubtersDOUBTING Thomases are aplenty as two different versions of the in-cident, one from the MILF and an-other from the Armed Forces, served to muddle the real story. Militant legislators also called for scientific verification to make sure that the body shown in photos furnished by the military was really that of Usman, who originally hailed from another province. As early as Monday morning, Malacañang confirmed Usman’s death and issued a statement say-ing that the killing of the wanted JI operative would be good for the peace process. Among those who wanted a posi-tive identification were Party-list Reps. Neri J. Colmenares and Carlos Isagani Zarate of Bayan Muna. Opponents of the passage of the BBL also expressed suspicion that Usman may already have been in the custody of some parties before he conveniently died in an encoun-ter “to reduce the number of BBL opponents and pave the way for its enactment into law.” Usman’s purported death came on the eve of the reopening of Congress,

which will deliberate on the BBL, par-ticularly on the many amendments that had been introduced after the Mamasapano incident. Members of the independent bloc in Congress warned that the so-called death of Usman may be used to coerce the Lower House into approving the BBL quickly, to the point of neglecting to tackle consti-tutional and legal issues swamping the proposed law. The first version of the incident was that Usman was killed in an en-counter with the MILF at the border of the towns of Suindulungan and Datu Saudi at 11:30 a.m. He was supposedly shot dead by men of a certain Commander Marl-boro after he refused to surrender and his remains were brought to the MILF’s Camp Afgan in Ba-rangay Muti in Guindulungan for documentation. As of Sunday afternoon, MILF chief peace negotiator Mohagher Iqbal said the killing of Usman was not yet confirmed. The second story about the killing came from the Armed Forces chief of staff, Gen. Gregorio Pio Catapang, who claimed that Usman was the victim of infighting, with Usman and five of his men being peppered with bullets. He claimed that Usman’s follow-ers had turned on him because of a $1-million bounty offered by the US, which was similar to the claim by police officers familiar with the botched January 25, 2015, operation in Mamasapano, Maguindanao, that money flowed to MILF informants that turned Marwan in. With Butch Fernandez and Rene Acosta

‘Usman’s killing part of Malacañang-MILFplot to stampede Congress into passing BBL’

By Marvyn N. Benaning | Correspondent

THE purported death of Jema’ah Islamiyah (JI) operative Abdul Basit Usman, a cohort of Malaysian

bomb expert Zulkifli bin Hir, alias Marwan, has spurred more questions from critics who could not believe two versions of his killing on Sunday.

SAFETY FIRST Manila Electric Co. workers replace worn-out electrical wires on Timog Avenue in Quezon City in preparation for the rainy season. Many fires have been blamed on exposed electric wires. NONOY LACZA

BusinessMirror news@businessmirror.com.ph A4

Economy

briefs11,154 filipino job seekers found

jobs on labor day–doleOver 11,000 Filipinos were hired-on-the-spot (HOTS) during the Labor Day job fairs in 56 venues all over the country, the Department of Labor and employment (DOLe) reported on Monday.

Based on the preliminary report of the Bureau of Local employment (BLe), 11,154 job seekers found jobs after visiting the different job fairs last Friday.

“This number translates to 20.8 percent HOTS rate, which exceeded our target of 20 percent,” said Labor Secretary rosalinda D. Baldoz in a news statement.

Last year the DOLe target for HOTS was only 15 percent.

region 3 was recorded with the most number of HOTS with 2,475; followed by region 4A with 2,460; and region 12, 1,434. But In terms of percentages, region 12 registered the highest HOTS, representing 52 percent.

The BLe report showed that there were 71,922 job applicants who registered on May 1, and that 32,439 of them were male and 39,483 were female. PNA

dswd maintains collaboration with lgus concerning street dwellersTHe Department of Social Welfare and Development (DSWD) is continuing its cooperative effort with local government units (LGUs) in addressing the problem on street dwelling and street children in major cities in the National Capital region (NCr). “Our DSWD-NCr regional Office will be conducting a meeting with mayors of LGUs in Metro Manila regarding the continuous efforts to address the street-dwelling problem by the coming week,” Social Welfare Secretary Corazon J. Soliman said. The DSWD, she added, is coordinating with Quezon City Mayor Herbert M. Bautista and Manila vice Mayor Isko Moreno, among others, as active partners in providing concrete solutions to the problem.

Soliman noted that since it is the LGU that have the mandate in ensuring that children are not in the streets, it is important to boost the efforts toward creation of solutions and stronger collaborative programs, especially in Quezon City and Manila where big presence of street children and their families is often reported.

She said that for its part, the DSWD is implementing the Modified Conditional Cash Transfer Program, wherein they are discouraging dwelling of street families in the risky streets by renting and paying an apartment for them for a period ranging from six to 12 months. PNA

By Estrella Torres

Finance and business leaders launched on Monday the Performance Government System (PGS) scorecard for government agencies and

local government units (LGUs) that seeks to address corruption, improve services and attract investments in the country.

The institute for Solidarity in asia (iSa) handles the PGS scorecard, a system patterned after the Bal-anced Scorecard of the Harvard Business School, where government agencies and LGUs will be rated based on their development goals and sustainable governance mechanisms.

Guillermo Luz, a fellow of iSa and cochairman of the national competitive council, said the PGS score-card also assesses preparedness of each city or munici-pality to respond to natural disasters and calamities.

The PGS helps local leaders to shape the image of the community and set development tracks, based on the natural resources, work force and infrastructure of their respective areas. These include the ability of LGUs to respond to challenges such as water and health sani-tation, and tourism development.

“it’s a very dynamic and progressive system, where the agencies and LGUs will be encouraged to deliver services better so they can attract investments and cre-ate jobs and livelihood opportunities for their people,” Luz told the BusinessMirror on Monday at the side-lines of the Public Governance Forum at the Philippine international convention center.

The PGS has four governance stages, namely, initia-tion, compliance, proficiency and institutionalization.

So far, San Fernando city in La Union is gearing for the fourth stage of institutionalization, as it aims to become northern Luzon’s center for Health and Well-ness by 2020 through increasing the number of model barangays and setting itself as an ideal business location for health and wellnesss enterprises.

Luz said the PGS scorecard system will also help LGUs and government agencies to manage their an-nual budget through efficient planning for programs.

The Department of Budget and Management had ear-lier raised concern on the more than P600-billion unuti-lized budget in 2014 due to the lack of proper planning by key spending agencies and LGUs.

He said the PGS system wil l a lso help agencies and LGUs manage their fiscal allocation efficient-ly through planning and proper implementation of programs.

Meanwhile, two LGUs—Bislig city in Surigao del Sur, and Municipality of Dinalupihan in Bataan—are now on the initiative stage of PGS. Bislig city is gearing toward becoming a model city for organic agriculture, while Di-nalupihan aims to become the primary wholesale trading center for agro-based and manufactured goods.

national agencies, such as the Philippine air Force, is now on the second stage of compliance for PGS scorecard with its modernization efforts, while the armed Forces of the Philippines is set for the third stage of proficiency as it aims to improve humani-tarian assistance and disaster-response programs.

Tuesday, May 5, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

PGS scorecard on good governance launched

in the 11th BiMP-eaga Leaders Summit last week in Langkawi in-ternational convention center in Malaysia, the said leaders are eye-ing the launch of commercial roll-on, roll-off (Roro) sea operation between Davao city and General Santos city in the Philippine side, with the port of Bitung in indo-nesia, and the sea route between Brooke’s Point of southern Palawan and Kudat port of Malaysia. The Mindanao Development authority (MinDa) said the BiMP-eaga would expect the Davao-GenSan-Bitung Roro operation to start anytime within the year,

while the Brooke’s Point-Kudat sea route would back connectivity at the western side of eaga “that strategically provides a faster and cheaper channel of trading goods from Palawan to Sabah, and vice versa.” “Maritime transport is crucial to BiMP-eaga, thus, the Philip-pines will continue to push for the Davao/GenSan-Bitung shipping service and the Brooke’s Point-Kudat,” said Trade, Undersecre-tary Prudencio Reyes, one of the Philippine senior officials who participated in the summit. The final outcome of the discus-

BIMP-Eaga leaders eye new sea link with Indonesia and Malaysia

By Manuel T. Cayon | Mindanao Chief Bureau

DAVAO CITY—Leaders from the Brunei, Indonesia, Malaysia, the Philippines-East

Asian Growth Area (BIMP-Eaga) are looking at two sea routes between the country and the two other member- countries to increase the accessibility of Mindanao with the rest of the other Asean subregional group.

sion has yet to be made public. He added that “transport and connectivity hold crucial roles in achieving the goals of the other three eaga pillars, which are agribusiness, tourism and the environment.” The BiMP-eaga was launched in 1994 “as a key strategy to ac-celerate social and economic de-velopment of less-developed areas in participating countries,” the MinDa said. “While other BiMP-eaga coun-tries are connected through land transport, the Philippines is work-ing on the establishment of air and sea linkages to be fully accessible to our eaga neighbors,” said Luwalhati antonino, chairman of the MinDa and the Philippine signing minister for BiMP-eaga. The BiMP-eaga Leaders Sum-mit is an annual meeting of heads of state of the four BiMP-eaga countries to assess the develop-ments and accomplishments of the subregion. The MinDa said, “as an addi-tional pillar, the sociocultural and education were formalized during the summit, seen to enhance mul-tisectoral and multistakeholder programs that promote educa-tion, social exchange, sports and cultural exchanges within the subregion.”

“connectiv ity br ings food, people and investments around the subregion, and will stir fur-ther socioeconomic developments within eaga,” Reyes said. Total trade within the BiMP-eaga reached P7.319 trillion, contributing to the subregion’s real gross domestic product (GDP) growth of 4.7 percent, the MinDa said. The BiMP-eaga statistical infor-mation brief compiled by the BiMP-eaga Facilitation center showed that “other factors contributing to the region’s GDP growth include the increase of its foreign direct invest-ments, which grew by 23 percent, from P360 billion in 2012 to P444.8 billion in 2013.” Domestic investments in the subregion also showed tremen-dous increase, from P50.16 bil-lion in 2009 to P202.84 billion in 2012, providing optimistic growth prospects for the subre-gion in the coming years. invest-ments in 2013 grew by 6.6 per-cent from the previous year, and amounted to P216.48 billion. The BiMP-eaga leaders are also “keen on reestablishing the air link-ages in the subregion, specifically the Davao-Manado, Zamboanga-Sandakan and Puerto Princesa-Kota Kinabalu routes, as sea connectivity is being pursued.”

By Lenie Lectura

THe Department of energy (DOe) has awarded 648 renewable-energy (Re)

contracts seven years after the Renewable energy act of 2008 was enacted into law. as of end-March this year, the agency said these con-tracts have a potential gen-eration capacity of 10,632.22 megawatts (MW), as against a total installed capacity of 2,752.20 MW. Of the 648 Re projects award-ed by the government, 402 are hydropower; 70, solar; 50, wind; 44, biomass; 41, geothermal; and six, ocean energy. These 613 con-tracts were awarded for grid use. On top of these, there were 35 Re contracts awarded for self-generation of electricity for their own use. These include one each for hydro and wind; 11 for solar; and 22 for biomass. The latest DOe data also showed that there are 166 pending Re projects, 117 of which are hydro; 29, solar; four, ocean; five biomass; six, wind; and four are geothermal. The potential generation capacity of these pending Re projects could reach 1,493.78 MW as against an installed capacity of 697.80 MW.

Under the national Renew-able energy Plan, the DOe aims to increase the country’s Re generation to 15,304 MW by 2030. The DOe has already stream-lined the process of Re applica-tions, from two years down to just 45 days, to ensure that Re developers and investors will have an easier time in applying for Re service contracts. To promote the use of Re on a larger scale and to attract new investments for Re facilities, the government is banking on the feed-in-tariff (FiT) system. FiT is a premium rate paid for electricity fed into the electricity grid from a designated renewable electricity-generation source, like solar energy system or wind power plant. approved by the energy Regulatory commission in July 2012, the FiT rate in the Phil-ippines is considered to be one of the lowest in the world. The impact of FiT to the electricity rate, estimated at two centavos per kilowatt-hour, is marginal, compared to the expected in-crease in the cost of traditional fossil fuels, like coal, in the com-ing years. This is the reason the DOe pushed for the increase of the installation target for solar, from 50 MW to 500 MW.

DOE: 648 RE contracts awarded in last 7 years

news@businessmirror.com.ph Tuesday, May 5, 2015 A5BusinessMirrorEconomy

Ka Leon Estrella Peralta, chair-man and founder of the Anti-Trapo Movement of the Philippines (ATM)

Inc., in a news statement, questioned the conduct of audits undertaken by the assigned resident auditors at

Group questions credibility of COA audit reportsAgroup on Monday scored

the Commission on Audit (CoA) for its “systematic and

malicious releases” of audit reports.

various government agencies. The ATM official cited a “fraudu-lent” COA audit report at the Bureau of Immigration (BI) by COA Audi-tors Marilyn Balbin and Fe Marie Dorado, where it was alleged that six official documents, namely, three Department of Justice (DOJ) legal opinions and three letters of clari-fication by the National Economic and Development Authority (Neda)

that definitively establish facts and legal conclusions that are contrary to the COA audit report, were “ma-liciously disregarded.”  “Disregarding one document is an oversight; disregarding two documents is a pattern; disregard-ing three documents is dereliction of duty; but completely disregard-ing six documents is malicious and criminal,” Peralta said.

  The ATM official also presented as evidence three letters of clarifica-tion from the Neda, confirming that “Pursuant to Section 12.10 [Con-tract Re-Opener] of the applicable 1999 BOT [build-operate-transfer] law IRR [implementing rules and regulations] and consistent with the DOJ Opinion dated March 6, 2007, the amendments to the BOT agreement between the BI and

Datatrail Corp. were presented, for information, to the ICC-Technical Board and ICC-Cabinet Committee meetings on April 20 and May 9, 2007, respectively, as the proposed amendments to the contract do not involve an increase in the amount, or change in the form of govern-ment undertakings and ICC-pre-scribed parameters, or contractual provisions.” Jovee Marie N. dela Cruz

Tuesday, May 5, 2015

OpinionBusinessMirrorA6

PHL: We are not pirateseditorial

THE news did not grab the front-page headlines as an upgrade in the government’s credit rating might do. Nonetheless, the fact that the Philip-pines is off the United States Trade Representa-

tive’s (USTR) 2015 Regular and Priority Watch List for intellectual-property rights (IPR) violations is important.

This is the second year in a row that the Philippines has not been on “the list.”IPR and the violations thereof are a nasty, and sometimes difficult, issue.

The “watch list” has been published since 1989. Prior to that first “Special 301 Report,” tourists going to Singapore, that model country for the rule of law, could buy a pirated cassette of almost any music on the planet. Street vendors would make copies to order while-you-wait. When the US started shaming na-tions about these copyright violations, Singapore suddenly got religion and clamped down on pirated music.

China though has always been the master of sleaze when it comes to viola-tions of IPR on everything, from music to designer clothes and accessories. It is, of course, not the Chinese people that are sleazy but the government. Yet China, the supposed global engine of economic growth, feels no embarrass-ment for ripping off both individuals and companies of their property.

It is a multibillion-dollar-per-year business of theft and the Chinese govern-ment has the thickest face in the world when it comes to this highway robbery.

On the Priority Watch List, the 10 biggest offending nations include our good neighbors, Indonesia, Thailand and China rounded out by India, Russia, Argentina, Pakistan, Venezuela, Chile and Algeria of all places. There are 26 counties on the watch list.

The legal issue is clear and unequivocal. You do not copy someone else’s design or duplicate another person’s work output and sell it without giving them a piece of the profits. We know that there are manufacturing facilities in China, which on one side of the building make genuine products and on the other side make the fakes with different materials, usually inferior.

The argument, and it might be considered valid to a certain extent, is that buyers are purchasing the fakes with complete knowledge of it and could not or would not buy the original due to the great price differential.

But still, the original designer has the right to agree or not agree to that method of marketing.

The sellers of pirated computer software and movies and music cannot make that argument since it is outright illegal duplication. But who is the worse criminal? The sellers could not exist without buyers similar to the ille-gal drug market. No one is getting fooled and every buyer knows it is pirated.

The USTR even has a list of “Notorious Markets” around the world that sell pirated goods including web sites and physical locations like the Seventh Kilometer Market in Odessa, Ukraine. No, none of our notorious markets ever made that list.

The Philippines was cited this year for improved IPR protection and civil and administrative enforcement. That’s good. It shows that we are mature enough to do the right thing.

Conclusion

PEACE and security justify the strengthening the police and military sectors, but other implications make it a high priority. From an economic perspective, for instance, having a strong

police and military is good for investment.

THE US economy is like that next-door neighbor who always smells of hard liquor and stares too long at the teenage girls. Everyone knows there is a problem but is too ashamed and

worried to do anything about it.

Why we need to strengthen the police, military

US economy is hitting a wall

THE EnTrEprEnEurManny B. Villar

In 2014 foreign direct invest-ments (FDI) totaled $6.2 billion, which the Bangko Sentral ng Pilipi-nas (BSP) described as an “all-time high,” and reflects a 65.9-percent increase from $3.7 billion in 2013.

The amount, however, accounts for less than 5 percent of the $128 billion total FDI that went to six major economies of the Association of Southeast Asian Nations—Singa-pore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines—last year. In the last three months of 2014 alone, Vietnam reportedly received about $8 billion of FDI, more than the Philippines’s total FDI for the whole year.

The Country Development Coop-eration Strategy 2012 to 2016, a re-port prepared under the Partnership for Growth between the Philippines and the United States, analyzed the

key restraints to growth.The report noted that armed con-

flict and the threat of international terrorism undermine prosperity and stability in the Philippines. The re-port said: “While violence remains scattered and relatively low‐level, its persistence discourages investment.”

Of course, there are other fac-tors that investors consider when they decide which country to invest in, such as incentives, predictability of policies and regulations and the profitability prospects.

However, peace and security is one of the first issues that investors consider. What investor would put up a factory or start a project in a place where he does not feel safe?

Thus, it is no wonder that Metro Manila accounts for a large share of the country’s economy, estimated at 35 percent to more than 66 percent

All the experts are spending most of their time analyzing the potential future actions of the US Federal Reserve (the Fed). I firmly expect that soon we will see these people crossing themselves for protection when they utter the words “interest-rate hike.”

We have been assured that the Fed will raise rates higher from near zero in June, September or in 2016. Maybe.

The truth is that it does not really matter when or even if US rates are raised. To pull the plug on the continu-ation of artificially low interest rates would require an increase in the base rate percentage say to 1 percent. How-ever, the US government would not be able to make the interest payments on its $17-trillion debt and still maintain any level of current spending. So, the choice would then be to slash govern-

ment spending and make sure the US economy goes into a recession or con-tinue to issue massive amounts of debt but at a higher interest rate.

Sensible countries are ignoring the potential rate hike. The Philippines raised its rates months ago because that was in the best interest of our economy. Thailand just lowered its rates, which would be silly if a potential Fed rate in-crease was imminent, because it is better for Thailand to have lower rates.

Even the currency markets, which are actually the smartest, most flexible, and, therefore, the most dangerous on the planet, are also ignoring a potential rate increase. Otherwise the US Dollar Index, measured against a basket of ma-jor currencies, would have stayed at its high of 100 hit in early March.

But the expert wisdom is that the Fed

of the total gross domestic product. Despite the numerous street crimes in the metropolis, it is also the re-gion where police visibility is high. A peaceful place is an attractive place for investments, so raising the capa-bility of the police and military will also help in making economic growth more inclusive, as it will encourage more investments in areas far from Metro Manila.

Establishing and maintaining peace will boost tourism, whose main attractions like beaches and moun-tains are far from the cities, in the provinces. We all know that tourism is a great job generator, so this means dispersal of investments and income in the countryside.

Without peace, it will be diffi-cult to solve the poverty problem. For instance, health workers will be reluctant to be assigned to areas with peace and security problem, so people in those areas will not be able to receive health services, resulting in malnutrition and less produc-tive citizenry. Teachers also would be afraid to go to areas where they have to live in fear. So, who suffers? Of course, the children, who will be deprived of education, the key to their escaping poverty.

The poorest provinces in the coun-try, where the poverty rate ranges from 41 percent to 68 percent, in-clude Lanao del Sur, Maguindanao, North Cotabato, Zamboanga del Norte and Northern Samar.

On the other hand, the least poor

provinces and districts, where the poverty rate ranges from 3.1 percent to 7.6 percent, include the Fourth District of the National Capital Re-gion (Las Piñas, Taguig, Parañaque, Pasay, Makati, Muntinlupa and Pate-ros), Cavite, Pampanga and Bataan.

Indeed, peace and security is one of the major reasons behind the pov-erty gap between these two groups. This is just internal threats. The Philippines is also facing external threats, such as the ongoing dispute with China over the West Philip-pine Sea.

In a lecture last month, former Supreme Court Associate Justice Antonio Carpio said in a lecture that China’s “nine-dash” claim over 85.7 percent of the West Philippine Sea have “grave implications” on the Philippines’s security, food and energy. He stressed that the govern-ment should strengthen the armed forces to defend the country’s terri-tory and sovereignty, as it could not expect other countries to do the job.

As I said in the second part of this series, we will need hundreds of bil-lions to strengthen our police and military. It is a price we have to pay if we want to sustain a strong econ-omy and our sovereignty. Without a strong police and armed forces, there is no foundation for growth, and growth will continue to be one-sided.

For comments, e-mail mbv.sec-retariat@gmail.com  or visit www.mannyvillar.com.ph.

will raise rates because the US economy is doing so much better and would be, per-haps, booming if it were not for things like the bad weather, poor foreign countries that aren’t buying US-made products, and low oil prices. Now about that US economy. Consumer sentiment is allegedly strong; spending is weak but only because of all the snow storms. But literally dozens of major US retailers have announced that they are closing more than 6,000 loca-tions in the next two years.

Low interest rates have made buying a car in the US much easier. People should be buying even more in anticipation of a potential rate hike. Except, in March US car sales recorded the largest year-on-year drop since 2009. US manufacturing out-put is the weakest in two years and em-ployment in that sector is the lowest since 2009. Here is more. Data just released by the Bureau of Labor Statistics shows that in one out of every five American fami-lies nobody has a job. McDonald’s plans to permanently shut down 700— about 5 percent of their total—restaurants over the course of 2015. US retail sales, wholesale activity, all factory orders, du-rables goods like refrigerator production, and core capital goods orders are all at, or near, 2009 levels.

But the only thing that really matters is what does a failure of the US economy (which will really take off at the end of the third quarter) mean to the Philippines?

While a lot of money is sent from the

US to the Philippines, it is not overseas workers remittances as such. The US money inflow is from balikbayans. Cash from permanent Filipino US residents is important but is overshadowed by work-ers’ cash flows. The US is not even in the top 10 of land-based overseas workers’ remittances. A significant portion of our call-center business is from the US. But this will not be significantly affected ei-ther. US telecoms and cell-phone provid-ers are important to our local call-center business. But if you personally are hav-ing financial problems, you may put off buying a new cell phone or reduce your usage costs but it is highly unlikely you will give up your phone.

A US customer disputing a $2 charge or a $200 error still needs to call the Philippines. The US company cannot say, “Times are tough; agents now need to talk twice as many calls.” But no mat-ter, US companies pay in part based on the number of calls agents handle.

The government is not pulling its economic weight and yet the Philippine economy is still doing pretty well. Keep that in mind over the next months as the US goes down.

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

Tuesday, May 5, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

What is China’s Navy doing in Mediterranean?

WHY is China announcing joint naval exercises with Russia in the Mediterranean, so far from home? There’s a global answer connected to the new cool

war and China’s interest in responding to US initiatives in the Pacific. But there’s also a more revealing local answer arriving from the nature of China’s growing involvement in the Middle East and North Africa.

By Mac Margolis Bloomberg View

POPE Francis continues to surprise. He recently slammed wage inequality between men and women as “a pure scandal,” called climate change man’s “slap in the face of

nature” and beckoned the homeless to tour the Sistine Chapel.

The global geopolitical explana-tion for the exercises, expected this month, is certainly interesting and distinctive. China’s military and security aims are primarily focused on the Pacific, and it can’t reason-ably hope to compete with the US or European powers in their own backyards. Yet, China gains sym-bolic value from presenting itself as an increasingly global power. A naval exercise in the Mediterranean—even one on a very small scale—is the kind of thing great powers do. The announcement is therefore use-ful to communicate China’s serious-ness and commitment to this rise. It may be even more valuable within China, where President Xi Jinping is nurturing an increasingly national-ist strain of pride under the slogan of the “Chinese dream.”

Seen in this light, the Chinese-Russian exercises also look like a symbolic response to US efforts to strengthen security relationships with China’s Asian neighbors. Japa-nese Prime Minister Shinzo Abe’s re-cent visit to Washington is a case in point. Abe has begun a genuine dis-cussion within Japan about whether to amend the pacifist constitution, transforming the country’s self-defense force into something more like a standard military.

The impetus for this change is China’s increasing security threat to its Asian neighbors—and a nag-ging uncertainty on the part of Jap-anese about whether the US would go to war to defend Japan in a pinch. Abe’s visit is part of an attempt by the Barack Obama administration to reassure the Japanese, but also to implicitly to lend credibility to Abe’s defense initiatives.

It’s worth noticing that this mili-tary positioning on both sides, even if symbolic, coexists with close eco-nomic cooperation between China and both Japan and the US if this seems unusual, that’s because it is: The chief feature of the cool war is the coexistence of strategic compe-tition and economic cooperation. One reason China can get away with a little minor saber rattling in the Mediterranean—alongside Vladimir Putin’s belligerent Rus-sia—is that it won’t affect China’s economic partnerships with any-one, including the US or European powers. That’s just the way the new cool war game is played.

Yet, this geopolitical angle doesn’t necessarily explain why the Mediterranean. Naval exercises al-most anywhere could’ve expressed the same thing, perhaps even more strongly, because China’s naval

Then there was his self-effacing quip about his compatriots’ famous egos, saying that many Argentines were surprised he took the name Francis and not “Jesus II.”

But the pontiff’s fellow Argen-tinians may find his latest strike to be his brassiest yet: He has asked the Vatican to open its archives on the Argentine Dirty War, papal ad-viser Guillermo Karcher told Radio America this week.

This is a big deal for at least a couple of reasons. First, as many as 30,000 people—no one knows for

sure—died or disappeared during one of Latin America’s most infa-mous dictatorships, which lasted from 1976 to 1983.

Catholics and communists, in-surgents and innocents, old men and pregnant women—the junta’s victims were as varied as the meth-ods it employed to dispatch them. And yet, despite a truth and rec-onciliation process in Argentina, which has sent many torturers to jail, the grisly detail of the guerra sucia remains largely walled by secrecy, and the Church has been

assets in the Mediterranean aren’t particularly significant.

The better explanation for why the Mediterranean is much more local. China has twice in recent years had to send its ships to res-cue and evacuate significant num-bers of Chinese workers who fell into danger as a result of regional instability. The first time was in Libya, where 35,800 Chinese workers had to be evacuated after the 2011 uprising and subsequent bombing campaign to bring down Muammar Qaddafi. The second time was in late March and early April, when Chinese ships helped offload several hundred Chinese workers from Yemen as the situa-tion there further deteriorated and Saudi airstrikes escalated.

These episodes brought home China’s evolving role in the Middle East and North Africa. So far, Chi-nese policy-makers have shown no interest in inheriting the traditional US role of maintaining hegemony in the Middle East to create stability and facilitate the flow of oil. (I call this the traditional US role because it was obtained roughly from the be-ginning of the Cold War until 2003. With the invasion of Iraq, the US ac-tually inverted the goal of stability by trying to create instability through regime change. That happened.)

However, China has to some degree included the Middle East in its strategy of building infra-structure projects in less-devel-oped countries and establishing substantial settlements of Chinese workers there.

In sub-Saharan Africa, the point of this strategy is to build govern-ment-to-government relationships and keep steady the flow of raw materials that China needs to grow economically. Chinese political influence is primarily an adjunct to business interests. In Libya the strategy accounted for the Chinese

presence. A comparable number of Chinese workers probably still ex-ists in Algeria—perhaps 40,000—and there are Chinese workers else-where in the region, although exact numbers are difficult to ascertain.

Over time, China’s increasing presence in the region will shift China’s interest in the Mediterra-nean. Large business investments will drive a national interest in, you guessed it, stability. Instabil-ity is what caused China to have to evacuate workers, which is the local reason China now has a naval presence in the Mediterranean. But over the long term, a more signifi-cant Chinese naval presence could be used to help create stability—not just to rescue Chinese workers when instability comes.

What I’m proposing is that China is at the very early stages of Middle Eastern mission creep – and that its Mediterranean naval exercises are a leading indicator of how that creep will proceed. Once a coun-try is a great power, and once the country is prepared to boast of its naval presence in a region, strategic logic requires that force to be able to accomplish strategic objectives. Right now, China’s Mediterranean fleet (if you can call it that) is doing rescue. Eventually it will need to do more than that, or else it’ll become a symbol of Chinese weakness, rather than growing Chinese strength.

The day when China becomes an important Middle Eastern power is still some time away. Much will depend on the trajectory of Iran, a Chinese ally that’s rising in the region, even as it continues to face challenges to the regime’s legitimacy at home. But when a history of China’s rise in the re-gion is written, it’ll have a page for these naval exercises. As China will learn, asserting its presence has benefits—but also comes with some significant costs.

complicit in the silence.The second reason is Francis him-

self. When the generals ruled, he was Jorge Mario Bergoglio, a ranking Je-suit priest trying to navigate the dic-tatorship’s hyper-charged politics. As a ranking member of the Jesuit order Society of Jesus, he presided over a divided clergy, and some militant Catholics accused him of doing the junta’s bidding.

Some Argentines faulted Bergo-glio for looking the other way over the scandal of “chicos apropiados,” the children of political prisoners abducted by torturers and then put up for adoption.

Those charges were never sub-stantiated, and the Vatican has flatly denied them, but suspicions resur-faced with the white smoke issuing from Saint Peter’s Basilica on March 13, 2013, when Bergoglio became Francis, and persist to this day.

Leading the j’accuse has been in-vestigative journalist Horacio Ver-bitsky, who reported that padre Ber-goglio neglected to intervene when two young Jesuit priests (whispered

to be in league with Marxist guerril-las) were abducted and tortured for several weeks in a military dungeon.

Many prominent Argentines came to Bergoglio’s defense, includ-ing Nobel Peace Prize laureate Adolfo Perez Esquivel. Shortly before he be-came pope, the then-archbishop of Buenos Aires issued a public apology on behalf of the nation’s bishops for “not doing enough” to protect priests targeted by the junta.

And this was no 11th-hour ges-ture of contrition. Bergoglio had long owned up to the church’s failings during Argentina’s “years of lead.”

“What did the church do back then? It acted as an organization with saints and sinners,” he told his good friend, Argentine rabbi Abraham Skorka, in one of a series of dialogues later published as “On Heaven and Earth.”

“There were Christians on both

sides. Christians who died in guer-rilla warfare and Christians who tried to save people, and Christians who became repressors, on the belief they were saving the country.”

What the church has yet to do is go public with what it knew about those dark days. “A large segment of the Church, not exactly Bergo-glio, was complicit in the dictator-ship,” Graciela Lois, a member of a group of the dictatorship’s victims’ relatives pressing the church to open its archives, told El Pais this week. “And we hope that opening up the archives will help us know the truth.”

Now the world’s most surprising religious leader has the chance to shed light on one of Latin America’s darkest moments and put the lin-gering suspicions against him to rest. That’s hardly the maneuver of a man trying to cover his tracks.

Edgardo J. Angara

IN retrospect, HSBC’s decision in 1993 to abandon Hong Kong for London’s Canary Wharf was one of modern history’s worst business moves. It seemed perfectly wise at the time,

just four years ahead of Hong Kong’s return to China and amid the early stages of Europe’s common currency boom. When the 1997 Asia financial crash arrived, it probably left Chairman William Purves and his colleagues feeling pretty happy about their decision.

I SERVED as agriculture secretary from 1999 to 2001—a time that I look back on with fondness. UP Prof. Butch Dalisay put it well in his account of my life entitled In the Grand Manner:

“[T]he Agriculture position was the culmination of another dream: the opportunity to lead the greening of the Philippines and to uplift the lives of its millions of farmers and their families.”

Negotiating peace

Pope Francis vs ‘Dirty War’ rumors

Just a dozen years later, being based in Europe seemed much less attractive. First there was Wall Street’s subprime debacle. That was followed, in short order, by the euro crisis, the Libor controversy, the chipping away of Swiss bank-ing secrecy and a UK tax clamp-down that cost HSBC $1.1 billion in 2014. It should be no surprise that current HSBC Chairman Douglas Flint now thinks return-ing to Hong Kong “would be po-tentially interesting.” Indeed, the only real question is, what is Flint waiting for?

HSBC finds itself in an enviable negotiating position. Hong Kong leader Leung Chun-ying’s superi-ors in Beijing would relish having one of the world’s premier financial institutions choose greater China over the West. President Xi Jinping would herald the move as a vote of confidence in China’s economic stability and his party’s broader le-gitimacy. It also would send a mes-sage to Hong Kong’s pro-democracy street protesters that their public agitation can’t derail big business.

HSBC would probably be reward-ed with as many deals and partner-ships in the Chinese market as its bankers can handle. That would cheer the bank’s long-suffering shareholders. But there’s more at stake in Flint’s decision than share prices and balance sheets. A move by HSBC could accelerate the pace of Chinese economic reforms.

The Communist Party has tend-ed to keep a relatively tight grip on the flow of money in China, but an entity HSBC’s size would expect to be granted more freedom in its business transactions. The bank’s presence in Hong Kong would give Xi strong incentive to loosen capi-tal controls and make the country’s banking system more transparent.

That would probably trigger a number of beneficial effects for the Chinese economy. Consider what happened after other Asian gov-ernments accelerated the interna-tionalization of their banking and trade systems after the region’s financial crisis in the 1990s. Once countries lowered their financial defenses, businesses had no choice but to adopt global practices and stomach greater competition. Similar shifts would likely occur

in China after any HSBC move. State-owned banks that hoped to operate in HSBC’s orbit, for example, would have to improve their corporate oversight and the quality of their assets.

It wouldn’t be a seamless reloca-tion, but the Hong Kong Monetary Authority, created just after HSBC departed for the UK, is ready to oversee the transition. In just two decades, the HKMA has built a formidable track record. It has pro-tected a dollar peg from numerous speculative assaults and steered the city’s economy through myriad financial and health panics. It has also pursed an aggressive loan-to-value policy that’s kept default rates low and worked with international institutions in ways that have en-hanced Hong Kong’s standing as a financial center.

True, the HKMA has never been responsible for a financial institu-tion that’s too-big-to-fail. (Make that too big to save: With a balance sheet of $2.6 trillion, HSBC is nine times the size of Hong Kong’s entire economy.) HKMA Head Norman Chan will have to expand opera-tions and hire loads of new regula-tors and analysts. But the HKMA believes it’s up to the challenge and says it “takes a positive attitude should HSBC consider relocating.”

Reformers in Beijing should, too. HSBC returning to its roots would be a clear win-win, for the short term and long term. The bank may have erred in uprooting itself some 20 years ago, but it’s time to let bygones be bygones.

Among the programs my staff and I initiated was the Mindanao Rural Development Program, which has since become a national initia-tive. The scheme was simple: em-power Mindanao’s poorest regions to decide for themselves how agri-culture funds should be spent.

For about six months, I spent 20 days a month crisscrossing the hinterlands of Mindanao and meet-

ing with farmers and local leaders. Unwittingly, such work got me deeply involved in the peace effort in war-torn Mindanao.

After government forces took over the Moro Islamic Liberation Front’s (MILF) Camp Abu Bakr in Maguindanao, then Autonomous Region in Muslim Mindanao Gov. Zacario Candao called to say that Hashim Salamat, then MILF Chief,

was ready to sit down and negotiate a peace pact. He flew to Manila and we sat down and discussed MILF Salamat’s request to help prepare a rehabilitation plan for Camp Abu Bakr. The draft would have been the start of the peace negotiations.

After briefing then-President Joseph Estrada and obtaining his permission, I convened a meeting at the Kabakan campus of the Uni-versity of Southern Mindanao. With some USM professors and two of Sal-amat’s lieutenants present, the group spent the next 48 hours discussing the different aspects of repair and rehabilitation. At the end of the ses-sion, we came up with the outline of an 18-month, P180-million imple-mentation program.

Back in Manila, I briefed Estrada who appeared pleased and gave me approval to go ahead and negotiate a peace pact. However, as Dalisay details in his book, the plan would never be implemented.

Earlier into my new job as

agriculture secretary, I negotiated a similar peace agreement with a breakaway faction of the commu-nist Left. The group was associated with Felimon “Popoy” Lagman and Nilo de la Cruz of the Alex Boncayao Brigade. The talks took place in Sal-vador Benedicto in the mountains of Central Negros Occidental and in two months the government and the communist group signed a peace agreement. That agreement still holds today.

In both cases, it was clear that economic and social development goes hand-in-hand with peace and order. Many factors lead to in-surgency, but underdevelopment of the countryside is prominent. This is one lesson I have learned that has relevance to the current debate on the Bangsamoro basic law and the possible resumption of peace talks with the National Democratic Front.

E-mail: angara.ed@gmail.com.

HSBC should move to Hong Kong ASAP

BLOOMBERG VIEWWilliam Pesek

BLOOMBERGNoah Feldman

Catholics and communists, insurgents and innocents, old men and pregnant women—the junta’s victims were as varied as the methods it employed to dispatch them. And yet, despite a truth and reconciliation process in Argentina, which has sent many torturers to jail, the grisly detail of the guerra sucia remains largely walled by secrecy, and the Church has been complicit in the silence.

HSBC finds itself in an enviable negotiating position. Hong Kong leader Leung Chun-ying’s superiors in Beijing would relish having one of the world’s premier financial institutions choose greater China over the West. President Xi Jinping would herald the move as a vote of confidence in China’s economic stability and his party’s broader legitimacy. It also would send a message to Hong Kong’s pro-democracy street protesters that their public agitation can’t derail big business.

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phTuesday, May 5, 2015

SM Prime income nearly tripled to ₧12.6B in Q1

PAL SUSTAINS TURNAROUND AS Q1 INCOME SOARS TO $85M

By Lorenz S. Marasigan

LEGACY carrier Philippine Airlines (PAL) started the year on a positive note, after recording $85 million

in comprehensive income in the first quarter of the year, a huge turnaround from the $20.7-million net loss posted the year prior. The sustained financial comeback was attributed to the declining price of fuel that resulted in lower airfare. This spurred air travel in and out of the Philippines, helping the airline recuperate from the rising expenses during the period. Revenues rose by 30 percent to $627 million in the first three months of the year from $482.4 million in the same pe-riod last year. The growth was fueled by the increase in passenger traffic after new international destinations were opened, as well as the expansion in domestic route network, following an enhanced com-mercial arrangement with PAL Express. The airline also embarked in more ag-gressive marketing and sales campaigns, resulting in improved yields per passen-ger revenue kilometer flown. Total operating expenses in the first quarter amounted to $556 million, 11 percent higher than last year’s print of $500.3 million, due largely to growth in passenger volume as a result of operat-ing more flights. The upsurge in revenues, however, outpaced the rise in operating expenses. The increase in operating expenses was tempered mainly by the decline in fuel costs. Jet fuel prices dropped dramati-cally from an average of $130.92 per bar-rel from January to March 2014 to $83.28 per barrel for the same period in 2015. In the first quarter of 2015, PAL took delivery of two brand-new Airbus 321 and disposed of four aging Airbus 340 and two Airbus 330 airplanes. PAL also returned to New York starting March 15, 2015, with service via Vancou-ver. Several domestic routes were added

to the network, such as thrice-weekly flights to Tablas in Romblon and the reopening of the Cebu hub. The airline operated a total of 10,948 roundtrip flights and served almost 3 mil-lion passengers in the first quarter of 2015. The carrier led by billionaire Lucio C. Tan first snapped out of the red zone last year, after registering P787 million in comprehensive income for the full-year period. It represented a dramatic turnaround from the P9.12-billion loss incurred in the last nine months of 2013. Two years ago, the carrier shifted its accounting period from a fiscal year ba-sis that ends in March to a calendar year, instead. This resulted in a shorter period of nine months for 2013. The flag carrier started to see its bot-tom line plummeting many years back, after its failed attempt at saving costs by fuel hedging. The downward trend con-tinued even with the change in manage-ment and the massive restructuring of its fleet and route. It posted profits in some quarters, but, still, the bleeding continued, as Filipinos shift their air-traveling needs to budget carriers, such as Cebu Pacific, AirAsia and Tigerair Philippines. The company was then bought back from San Miguel Corp., and Tan started handling the manage-ment with his former executive Jaime J. Bautista at the forefront. Baustista started to clip what the food-to-infrastructure firm started, initializing reforms from the rationalization of the multibillion-dollar acquisition of new planes from French aircraft maker Airbus to postponing plans of launching more flights to Europe. “We need to consolidate and build on these gains to strengthen the foun-dation for future growth, aware that we operate in a very volatile environment,” he said on Monday. “As always, we re-main focused on our goal of transform-ing PAL into the airline of choice in all markets it serves.”

Sandiganbayan denies cnn Philippines’s pleato interview senators

By VG cabuag

SM Prime Holdings Inc., the country’s largest operator of shopping malls owned by the Sy

family, said its income nearly tripled in the first quarter of the year, as a result of gains from the sale of securities and new mall openings. The company said in a state-ment that its income for the period reached P12.6 billion, or about three times more than its P4.69-billion income last year. SM Prime said the increase was a result of the sale of mar-ketable securities worth P7.4 bil-lion during the period, without which its income just grew by 14 percent to P5.2 billion.

“There are a lot of reasons to be optimistic, with con-sumer spending getting a boost from lower oil prices and im-proved consumer confidence. The strong economy provides much motivation for us to ex-pand and grow our business more aggressively to take advantage of new opportunities, particularly in the provincial areas. We can

grow all areas of business, malls, residences, commercial and tourism-related developments together to achieve synergies,” SM Prime President Hans Sy said in a statement. SM Prime’s rental revenues from retail and commercial spaces, which accounted for 57 percent of the consolidated rev-enues, grew 10 percent to P9.4 billion in the first quarter, from P8.6 billion last year. The growth was led by the significant increase in rental revenues, primarily from the new malls that opened and the expansion of existing malls in 2013 and 2014. These were SM Aura Premier in Taguig, SM City BF in Parañaque, Mega Fashion Hall in SM Megamall in Man-daluyong, SM City Cauayan in Isabela and SM Center Angono in Rizal. Combined, these new and ex-panded malls have a total gross

floor area of 564,000 square meters. Growth was also partly driven by the company’s increas-ing office spaces. Aside from Two E-com Center in Pasay, SM Prime launched SM Cyberwest in Que-zon City. Meanwhile, same-store rental grew by 7 percent, sustaining the growth posted in 2014. The mall’s cinemas generated lower ticket sales of P1 billion from P1.1 billion last year, as a re-sult of the decrease in blockbuster movies shown in the first quarter of 2015 from last year. Meanwhile, amusement and other revenues increased by 32 percent to P900 million in the quarter due to the strong pa-tronage for amusement rides, especially the opening of Sky Ranch Pampanga. Cinemas and amusements accounted for 11 percent of SM Prime’s consolidated revenues during the period.

“Given the nature and character of the News.ph talk show, it is expected that the in-terview to be conducted with the accused will necessarily touch upon the political angle of his pending cases before this honorable court. The interview will undoubtedly discuss accused’s status as a detained senator, his views on the criminal charges he is currently facing before this honorable court, and/or his role in the PDAF scam, while serving in the Senate,” the prosecution explained in its resolution. The court gave weight to the prosecu-tion’s argument, saying the court must al-ways “avoid the potentiality of prejudging the case, influence the court or obstruct the administration of justice.” The antigraft court also gave weight to the letter that Enrile, through his legal counsel, submitted to the court on April 21, saying, “In all likelihood, he will politely decline any request for an interview from any group at this time bearing in mind his present health condition.” Enrile, in his letter, also acknowledged that

any comment he might be giving in a possible interview, “if intemperate…can become a subject of contempt proceeding for violating the rule on subjudice.” While Enrile has yet to formally file a motion seeking house arrest, several colleagues from the Senate, as well as the House of Represen-tatives, have called on the court to place the 91-year-old senator under house arrest, citing his advanced age and deteriorating health. The prosecution, in its letter, said the interview would also generate undue “prejudicial publicity, sympathy and sup-port” for the accused, especially on the issue of whether accused Enrile should be placed under house arrest. “Considering accused Enrile’s representa-tion that he might decline such a request for interview due to his present state of health and the objection of the prosecution to avoid the potentiality of prejudging the case, influ-ence the court or obstruct the administration of justice, the said request of Marilyn Nicasio, program researcher, Current Affairs of Nine Me-dia Corp./CNN Philippines, is hereby denied,” the court further said. PNA

Continued from A1

In a separate text message to financial reporters, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said a region-wide slowdown will likely manifest in the investment sector, as well as in the exports sector of the $272-billion Philippine economy. “Economic slowdown will tend to cause some moderation in the propensity of Chinese investment in the global economies including the Philippines. On top of that, exports to China could also see some correction,” Guinigundo said. “China is a big, vast market with newly prospering consumers. It is an important counterweight to continued weaknesses in other emerging markets and

advanced economies,” he added. While this slowdown seems to affect a lot of countries, especially those who are heavily dependent on China for trade or investment, the success of its growth transition initiative will benefit countries in the long run. “A structural slowdown and transition to a more sustainable consumption-driven growth path is credit positive,” Fitch said. “We see a more sustainable economic performance in China as it shifts from export- and investment-led to domestic demand, particularly consumption-led economic growth,” Guinigundo also said.

Sluggish china. . . Continued from A1