By Jovee Marie N. dela Cruz

With no end in sight for the congestion at the Ninoy

Aquino international Airport (Naia), lawmakers have given transport and airport authorities a January deadline for the submission of a master plan that will set in motion the use of Clark international Airport (CiA) as the substitute main gateway.

See “Clark plan,” A2

PESO ExchangE ratES n US 47.1340 n jaPan 0.3848 n UK 71.0686 n hK 6.0818 n chIna 7.3768 n SIngaPOrE 33.4236 n aUStralIa 34.1155 n EU 50.1459 n SaUDI arabIa 12.5473 Source: BSP (25 November 2015)

www.businessmirror.com.ph n Thursday 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 5 sections 30 pages | 7 days a weekn Thursday, November 26, 2015 Vol. 11 No. 49

A broader look at today’s businessBusinessMirrormEDIa PartnEr Of thE yEar

2015 EnvIrOnmEntal lEaDErShIP awarD

UnItED natIOnSmEDIa awarD 2008

INSIDE

B2-1

Asean+6: Trade bloc slated for next year SINGAPORE lowered its growth

forecast for 2015 because of weakness in manufacturing,

and said gains will continue to be modest next year, even as the global economy improves.

Singapore cuts growth forecastwww.businessmirror.com.ph Editor: Max V. de Leon • Thursday, November 26, 2015

Asean BusinessMirror

Asean-EU PerspectiveHENRY J. SCHUMACHER

AFTER defending the interests of oil-exporting nations for five decades, the Organiza-

tion of Petroleum Exporting Coun-tries (Opec) has made a surprising choice with its newest member: a country that consumes about twice as much crude as it pumps.

Indonesia will rejoin the Opec as its 13th nation next month, almost seven years after suspending its membership. The country says that as Opec’s only Asean constituent, it will provide a vital link to the region where demand is growing fastest. Still, saddled with an oil-import bill of about $13 billion last year, Indo-nesia makes an unlikely addition to the exporters’ club.

“If you’re accepting net-oil im-porters into the organization, it speaks volumes about the marginal-ization of Opec,” said Seth Kleinman, head of energy strategy at Citigroup Inc. Indonesia is “never going to cut” supply, he added.

Official explanations that paint Indonesia as a conduit between pro-ducers and consumers don’t fully illu-minate a move that’s fundamentally at odds with Opec’s mission: Why al-low a country that will benefit from lower prices into a group set up to underpin prices? 

Citigroup says it’s another sign Opec has abandoned its role in de-fending prices after last year choos-ing to maximize its market share in the face of a global glut. Opec hasn’t announced any specific market mea-sures since 2008.

Odd decisionINDONESIA contends its return to the group will be mutually beneficial. As a country that both consumes and produces, it can provide Opec with a bridge between the two sides of the oil market, Energy Minister Sudir-man Said said in June. 

“It’s strange,” said Jamie Webster, senior director at consultants IHS Inc. in Washington. “Nothing has dramatically changed since they left some years ago—it’s not like they’ve found some Gawar-like field and now suddenly want to be on top of things,” he said, referring to the biggest deposit in Saudi Arabia.

Indonesia believes the move will both ensure access to crude supplies —it’s already in talks to buy Iranian crude once international sanctions are lifted—and attract investment to revive its energy sector, such as a project to build a  refinery with Saudi Arabia.

“There’s prestige in being part of

the organization again,” said Harry Tchilinguirian, head of Commodity Markets Strategy at BNP Paribas SA.

Shifting ranksBRENT crude added 12 cents to $46.24 a barrel on the London-based ICE Futures Europe exchange at 12:56 p.m. Singapore time. The global benchmark has lost more than 40 percent over the past year.

Indonesia is projected to produce 850,000 barrels a day this year, ac-cording to a November 13 report from the International Energy Agency (IEA). That’s about 789,000 less than it consumed last year. Only Libya, Ecuador and Qatar produce less among Opec’s member-states. 

In October 2014 Indonesia gave up on a target of restoring output to 1 million barrels a day. Crude output has dropped more than 50 percent since the mid-1990s as shifting reg-ulations and complicated permits deter investments in new fields.

It’s not unprecedented for Opec’s line-up to shift over time. Its ranks last swelled in 2007 when Ecuador was readmitted after departing in 1992. Gabon left in 1995, though hasn’t announced any plans for a comeback.

One impact of Indonesia’s return

could be a change in the group’s col-lective production target, which has held steady for the past four years at 30 million barrels a day. Officials are considering raising the limit to 31 million to incorporate Indonesia’s output, according to two delegates who spoke confidentially.

Neutral partyTHAT still wouldn’t mean any change in the group’s actual output: Opec has flouted the current limit in all but four months since its in-troduction, according to data com-piled by Bloomberg. Even a raised cap at 31 million barrels would be almost 800,000 a day less than its 12 members pumped in October, IEA data show.

A last benefit could be a resolution to years of disagreement on appoint-ing a new secretary-general. Opec has been extending the term of Libya’s Abdalla el-Badri—originally due to stand down in 2012—as countries block proposed candidates from Saudi Arabia, Iran and Iraq. Indone-sia, which has filled the position of secretary-general on four different occasions since 1961, could serve as a neutral alternative, above political rivalries in the Middle East.

Bloomberg News

THE Asean+6 grouping is expected to declare the outcome of free- trade talks under the Regional Comprehensive Economic Partnership (RCEP) at the Asean Summit in Kuala Lumpur from November 19

to 22. The joint declaration will pave the way for the China-led trade bloc to become enforced next year.

A total of 16 RCEP members tentatively agreed at the 10th meeting of negotiation teams from October 12 to 16 in Busan, South Korea, to elimi-nate tariffs on 65 percent of all goods, amounting to 8 to 9,000 items, under the RCEP plans.

Of the 35 percent of total products not included in the initial agreement, RCEP members are expected to gradually cut tariffs to zero within 10 years after 2017 for 20 percent, while further talks are needed for the other 15 percent of products, which are mostly sensitive items.

The RCEP was launched in November 2012, with the aim of establishing deeper economic cooperation between the 10 Asia-Pacific Economic Coop-eration (Apec) members and Australia, China, India, Japan, New Zealand and South Korea, with a focus on trade in goods, services and investments.

If signed, the agreement will create an economic block with a combined population of 3.5 billion and a trade volume of $10.7 trillion, accounting for nearly 30 percent of the world’s trade.

China has been seen as the key driver of the regional trade pact, which is viewed as an alternative to the US-led Trans-Pacific Partnership (TPP), from which the world’s second-biggest economy was excluded.

Within the RCEP, seven countries—Australia, Japan, Malaysia, New Zealand, Singapore, Vietnam and Brunei Darussalam—are part of the 12-nation TPP.

Thailand is taking these new RCEP activities seriously and believes that they will benefit more from RCEP than from Asean or TPP. The Thai government plans to introduce more measures to tempt investment in 10 targeted industries:

n Next-generation carsn Smart electronicsn Affluent, medical and wellness tourismn Agriculture and biotechnologyn Foodn Robotics for industryn Logistics and aviationn Biofuels and biochemicaln Digital sectorn Medical sectorSimilar to the Philippines, Thailand is developing road maps; the study

reported that if Thailand seriously promoted the 10 industries, GDP growth could reach 5 percent to 6 percent a year based on private investment, which is expected to increase by 10 percent in 2016.

The study also suggested Thailand to support other incentives such as corporate income-tax limit of not more than 15 percent, a personal income- tax limit for foreign experts of not more than 15 percent and facilitation of their work permits (Philippines watch out!).

Foreign investors should also be allowed to hold 100 percent of the first stage of research and development projects and the leasehold for land plots for 99 years before selling them back to the government once due.

Indonesia set to rejoin Opec with bias for lower oil prices

The Ministry of Trade and Indus-try on Wednesday forecast economic growth in 2015 at “close to 2 percent” and between 1 percent and 3 percent in 2016. It previously forecast 2015 growth at between 2 percent and 2.5 percent.

Singapore, a city-state at the tip of peninsula Malaysia, is the wealthi-est economy in Southeast Asia, but has shifted to lower-growth rates in the past decade as other coun-tries, including China, eroded its traditional strengths in electronics and other manufacturing. It has en-couraged investment in higher value industries, such as pharmaceuticals, and also tried to boost services by opening two casinos, encouraging tourism and becoming a center for private banking.

The ministry said global growth is expected to improve next year, but Singapore and other countries in Southeast Asia may not see “significant uplift” in demand for their exports.

China’s economic slowdown has dimmed its appetite for imports; growth in the US is driven by service industries, and both China and the US are tending to rely more on do-mestic manufacturers, it said.

“Against this backdrop, the growth outlook for the Singapore economy in 2016 is modest,” the report said.

Singapore’s economy grew 1.9 percent from a year earlier in the third quarter, marginally lower than the 2-percent growth in the previous quarter, the ministry said.

MALAYSIA’S biggest po-litical party faces a trust deficit, a government

minister warned, highlighting the impact of a months long po-litical scandal surrounding Prime Minister Najib Razak.

Members are losing their connec-tion to the United Malays National Organization (UMNO), which leads the ruling coalition, Hishammud-din Hussein—one of the party’s vice presidents—told reporters on Tuesday in Kuala Lumpur. Hisham-muddin, who called for unity, is also the defense minister.

“UMNO is now facing a trust test, which is very complicated and wor-rying,” Hishammuddin said. “But I am confident we will come out of this and strive to be better for our survival, the party and country.”

Hishammuddin was speaking ahead of the party’s annual general assembly in December. More than 700 resolutions were submitted by 191 divisions for the meeting, rang-ing from education to religion and the economy, he said.

The comments reflect the risk that the imbroglio that’s embroiled Najib erodes support for a party that has been in power since in-dependence in 1957, but won re-election in 2013 with its narrowest margin yet—it lost the popular vote for the first time. UMNO has its

power base in the country’s ethnic Malay population.

Najib, who is UMNO’s presi-dent, has faced criticism after it was disclosed that hundreds of millions of dollars ended up in his private accounts before the 2013 vote. He has removed detractors from cabinet including his deputy premier and a minister, even as they remained senior leaders in the party.

Middle EastTHE premier, 62, has said the funds in accounts that have since been closed were political dona-tions from the Middle East rather than public money, an initial con-clusion also reached by the Malay-sia Anti-Corruption Commission. The funds were to meet the needs of the party and the community and not a new practice, he has been cited as saying.

Former Prime Minister Mahathir Mohamad, 90, has been on a pub-lic campaign to get Najib out even before the donations scandal and allegations of financial irregulari-ties at debt-ridden state investment company 1Malaysia Development Bhd. (1MDB) led to political ten-sions and prompted thousands of anti-government protesters to rally in the capital.

“Given the current subdued demand, and the fact that the In-ternational Monetary Fund and World Bank have both lowered fore-casts, it isn’t a surprise that Singa-pore has followed suit,” said Song Seng Wun, an economist at CIMB Private Banking.

Singapore’s economy grew more than initially estimated in the third quarter as services helped offset a decline in manufacturing amid slowing growth in China. The local currency rose.

Gross domestic product rose an annualized 1.9 percent in the three months through September from the previous quarter, when it fell a re-vised 2.6 percent, the trade ministry said in a statement on Wednesday. That compares with an initial gov-ernment estimate of a 0.1-percent expansion and a median forecast for no growth in a Bloomberg News survey of 15 economists.

The city-state is expecting eco-nomic growth to be “close to” 2 per-cent in 2015, the lower end of its earlier forecast for an expansion of 2 percent to 2.5 percent. GDP is ex-pected to increase 1 percent to 3 per-cent in 2016, the trade ministry said.

Singapore has relied on its po-sition as an Asian financial hub to

bolster services exports as overseas demand for its goods faltered amid slowing growth in China and uneven recoveries in the US and Europe. While the island’s industrial pro-duction fell for an eighth straight month in September, retail sales growth has been positive over the same period of time.

“Singapore has avoided reces-sion despite the difficulty in the manufacturing sector,” Song said. “Government spending on infra-structure and growing employment in the services sector is helping to boost domestic consumption. Singa-pore is still facing headwinds amid slowing global demand.”

Currency risesSINGAPORE’S dollar climbed 0.3 percent to S$1.4063 against the US currency as of 8:56 a.m. local time.

The Singapore dollar’s nominal effective exchange rate remains “comfortably” within the policy band, the Monetary Authority of Singapore’s Deputy Managing Direc-tor Jacqueline Loh said at a briefing on Wednesday. Downside risks to growth are within the MAS’s plan-ning parameters and the central bank’s policy remains appropriate

See “Malaysia,” B2-2

See “Singapore,” B2-2

Malaysia’s ruling party faces trust deficit, minister says INDIAN Prime Minister Narendra Modi delivers a public speech to a crowd of mostly Indian nationals at the Singapore Expo on Tuesday in Singapore. Modi is on a two-day official visit to the city-state. AP

SportsBusinessMirror

By Mike BresnahanLos Angeles Times

OAKLAND, California—History was created on Tuesday with the Los Angeles Lakers on the court. It wasn’t the type their franchise was built upon, continuing an unsettling

downward spiral that chewed them into tiny pieces since acquiring Dwight Howard and Steve Nash in the seemingly perfect summer of 2012.

The Golden State Warriors pasted the Lakers on Tuesday, 111-77, setting a National Basketball

Association (NBA) record with 16 consecutive victories to start the season.

The Lakers, clearly at the other end of the basketball scale, fell to 2-12, their worst mark

through 14 games since 1957. Kobe Bryant had four points and

made only one of 14 attempts (7.1 percent), tying his worst shooting

night ever when taking more than four shots. He was also

one for 14 last November against San Antonio.

Not even Bryant’s methodical,

prolonged warm-up could

help the 37-year-

old

break out of a season-long slump. “Man, it’s cold in here,” he said to no one in particular three hours before tip-off, making his way around the court and shooting from seemingly every angle. He missed his first five shots in the game, including two air-balled three-point

attempts at Oracle Arena. Cold, indeed. Then he missed his next nine shots

after making a three-pointer. He did not play in the fourth quarter. The

Lakers trailed by 34 after three. Bryant said his off night

had to do with the team’s overall play—blown defensive coverages,

unnamed players not running the offense, etc. “I’m just kind of frustrated with what we were doing,” Bryant said. “It bothered me so I got out of my Zen tonight.” Lakers Coach Byron Scott said he still had “a lot of faith” in Bryant and wouldn’t reduce his minutes to try to increase his efficiency. He did want fewer three-point shots from Bryant, who missed six of seven. Bryant claimed he would rebound from this, which sounded familiar,

perhaps hauntingly, from some of his other poor nights this season. “I’m fine. Honestly,” Bryant said. “My shooting will be better. We’ll be better. I could have scored 80 tonight and it wouldn’t have made a damn difference. I could be out there averaging 35 points a game and we’d be, what, 3-11? We’ve got to figure out how to play systematically in a position that’s going to keep us in a ball game.” Jordan Clarkson didn’t do much (four points, two-of-11 shooting), Roy Hibbert too (two points, 0-for-3 shooting) and nobody scored more than 10 for the Lakers. A couple of days before the game, Bryant left open the possibility of an upset against Golden State. “I’ve seen stranger things happen,” he said, but there was nothing odd or unusual about Tuesday’s game. The Lakers continued to play poor defense and the Warriors continued to score at will. The Warriors had 10 assists in the first quarter. The Lakers had none. The score was 30-11. Stephen Curry had 24 points and nine assists for the Warriors, who passed the 15-0 starts of the Houston Rockets in 1993-1994 and Washington Capitols in 1948-1949. At least one piece of the Lakers’ past was satisfied. Luke Walton has guided the Warriors as their interim Coach, while Steve Kerr recovers from off-season back surgery. “I almost feel guilty a little bit because this should be Steve doing this right here. He loves it so much that he should be having the time of his life right now,” Walton said. Walton, 35, won championships with the Lakers as a role player in 2009 and 2010, days that seem far in the past. Very, very far. There was a line of Lakers employees who briefly hugged Walton after the game—longtime trainer Gary Vitti, Scott and Bryant. It was their brush with history for the night. Somehow, last year’s 21-61 record might seem like an achievement. In Washington, Paul George scored a season-high 40 points and made seven three-pointers, part of a franchise-record 19 by the Indiana Pacers in a 123-106 victory over the Washington Wizards in the NBA on Tuesday. C.J. Miles added 32 points, his most since joining the Pacers before

the start of last season, as Indiana won for the ninth time in 11 games. Miles was eight-of-nine from beyond the arc, and George also missed only once from deep. The Pacers finished 73.1 percent (19 of 26) from three-point range, crushing their previous season high of 44.4 percent (12 of 27). Gary Neal scored 23 points off the bench for the Wizards, whose

three-game winning streak was broken. In Memphis, Tennessee, Mike Conley scored 21 points, Jeff Green added 19 and seven Memphis players reached double figures in a

victory over Dallas, 110-96. Marc Gasol had 15 points and 10 rebounds for Memphis, which won its fifth in the last six games. Matt Barnes and Mario Chalmers added 14 points apiece, and JaMychal Green contributed 13. Raymond Felton and J.J. Barea each scored 16 points and tried to pull the Mavericks back into the game in the fourth quarter. Dirk Nowitzki finished with 14 points and Zaza Pachulia had 13, both also grabbing 10 rebounds. Wesley Matthews had 11 points and Deron Williams finished with 10 as Dallas lost its second straight. In Atlanta, Paul Millsap scored 25 points, Jeff Teague added 16 and Atlanta beat Boston, 121-97. Atlanta had dropped four of five and was coming off a loss on Saturday at Cleveland in which Coach Mike Budenholzer was ejected and subsequently fined $25,000 for bumping into referee Ben Taylor. The Hawks essentially put the game out of reach with an 18-3 run that made it 100-80 with 6:20 remaining on Teague’s three-point play. Avery Bradley had 15 of his 25 points in the first half for Boston, which has dropped three of four. Isaiah Thomas scored 14 points as the Celtics, who began the game ranked ninth in opponent scoring, allowed a season high in points. Los Angeles Clippers beat Denver, 111-94 while Chicago edged Portland, 93-88. With AP

Hawks retireMutombo’s 55

Parker namescubs for family

ATLANTA—The Atlanta Hawks retired Dikembe Mutombo’s No. 55 jersey on Tuesday night to honor the longtime

shot blocker’s Hall of Fame enshrinement. Mutombo signed as a free agent in 1996 to make Atlanta the second stop on an 18-year career he spent with five other teams. “I don’t think I ever thought my jersey would be retired,” Mutombo told reporters after his jersey was hung from the arena rafters in a halftime ceremony. “My name will stay forever.” The 7-foot-2 Mutombo was a four-time National Basketball

Association (NBA) Defensive Player of the Year, an eight-time All-Star, and he ranks second on the league’s career blocked shots list and 20th in rebounds. Through his foundation, Mutombo, 49, built a hospital that has served 140,000 in his native Congo. He twice won the NBA’s J. Walter Kennedy Citizenship Award and now works for the league as a global ambassador. Mutombo was enshrined in the Naismith Memorial Basketball Hall of Fame two months ago. AP

SAN ANTONIO—Spurs star Tony Parker had a walk on the wild side this week and has named three

African lion cubs at the San Antonio Zoo after his wife, their son and himself. Zoo officials said on Tuesday that Parker had decided on Axelle, Josh and T.P. after earlier making the top bid for the naming rights. The National Basketball Association player on Tuesday morning slipped into the lions’ den, accompanied by two zookeepers, and helped the cubs play with some toys. Zoo authorities didn’t immediately say how much Parker bid to name the two males and one female born July 25. AP

SWEET SIXTEEN

GOLDEN STATE SETS NBA RECORD FOR BEST START

C1 | Thursday, November 26, 2015mirror_sports@yahoo.com.phsports@businessmirror.com.phEditor: Jun Lomibao

GOLDEN State Warriors guard Stephen Curry (30) drives past Los Angeles Lakers guard Kobe Bryant. (Above photo) Chicago Bulls guard Jimmy Butler (right) and Portland Trail Blazers center Mason Plumlee (24) are separated by the officials after getting into a shoving match. AP

MUTOMBO

aseaN B2-1

sPORTs C1

live longer!

healTh&FiTNess

Holiday spending is expected to keep import growth robust throughout the fourth quarter, according to the National

Economic and development authority (Neda). The Philippine Statistics authority (PSa) reported that imports posted a growth of 6.7 percent to $6.17 billion in September. With this, the combined imports for the nine-month period reached $49.92 billion, a 2.3-percent increase. “Upbeat sentiment from the business sector and an overall improvement in consumer expec-tations for the coming quarter will likely keep imports afloat, especially those in the manu-facturing and construction sectors,” Economic Planning Secretary arsenio M. Balisacan said.

“improved purchasing power due to low in-flation will also keep consumer demand vibrant in the succeeding months, and will further be ramped up by holiday spending,” he added. Balisacan said the higher import bill was also due to low prices of goods being sold globally, brought about by the low global demand for various commodities. With this, Balisacan said local industries can take advantage of the low prices and beef up their inventory and expand capacity at this time. “ on the back of sluggish global growth, eco-nomic policies should continue to encourage investments that cater to domestic demand. Continuous improvements in product qual-ity, innovation and infrastructure support to

local industries should be sustained in order to elevate the competitiveness of the domestic industries, and make them at par with imported products,” he said. The Neda said the growth in imports in September was due to the 40.7-percent growth in capital goods importation to $2 billion. This, Balisacan noted, was the highest for the year. Raw materials and intermediate goods also increased by 20.1 percent in September 2015 to reach $2.7 billion. The import bill for consumer goods grew by 10.1 percent to $876.8 million in September due to higher purchases of durable goods such as passenger cars and motorbikes.

Cai Ordinario

Indicators point to rising imports–neda

jaPan’S naKatanISUPPOrtS U.S. InSOUth chIna SEaJapanese Defense Minister Gen nakatani

on Tuesday expressed his support for the Us navy’s sailing of a warship close to one of

China’s artificial islands in the south China sea. nakatani told reporters after meeting adm. Harry Harris, the commander of the Us pacific Command, that the Us military was at the fore-front of the international community’s efforts to protect open, free and peaceful oceans in the south China sea. He added he expressed Japan’s support for Us actions to Harris. “The international community will not allow the unilateral changing of the status quo by force, and our country believes the same,” nakatani said. “The Us believes the same, too, and we agreed on this point.” The Us navy last month sailed a guided mis-sile destroyer inside what China claims is a

Transport officials orderedto submit Clark plan by Jan

‘aCT FOR OuR FuTuRe’ hundreds of students form the words “act For Our Future” to launch an advocacy by the government’s National youth Commission (NyC) that aims to enhance public awareness on climate change at the Rizal high school campus at suburban Pasig City, east of Manila, on wednesday. The environmentalists are also calling on the leaders of industrialized nations to seriously consider reducing carbon emissions, which lead to global warming. AP/Bullit MArquez

singaporecuts growthforecast

sweet sixteen

See “Nakatani,” A2

H

BusinessMirror news@businessmirror.com.ph�ursday, November 26, 2015 A2

News12-mile territorial limit around Subi Reef in the Spratly Islands. The move was a challenge to what the US considers Beijing’s “excessive claim” of sovereignty in those waters. He said Japan would continue to help coun-tries in the region bolster their own maritime forces. Japan is giving 10 patrol ships to the Philippine Coast Guard. “We have proactively participated in activities promoting the regional stabil-ity, including helping build the capacity of countries around the South China Sea and holding joint exercises between the US mili-tary and the Japanese Self-Defense Forces,” Nakatani said.

The defense minister’s visit to Hawaii to meet with senior US military leaders was his first since Japan’s parliament in September approved legislation loosening post-World War II constraints on its military. The new law allows Tokyo’s military to defend its allies, even when the country isn’t under attack. The law will enable Japan to work more closely with the US and other nations. The new law would also allow Japan to help defend a US ship under attack. The US has long been able to help a Japanese ship in the same situation, but Japan’s prohibitions against collective self-defense didn’t allow the reverse. The legislation sparked protests and de-bate in Japan about whether Tokyo should shift away from its pacifist ways to face growing security challenges. The law’s sup-porters say Japan’s neighborhood has become a more dangerous place, citing North Korean missile tests and Chinese challenges to Japanese sovereignty over remote islands.

They say Japan’s military needs to be more active to deter China and North Korea, and help preserve Japan’s peace and prosperity. A major goal of the legislation is to allow the military to work more closely with its main ally, the US, strengthening their joint capabilities. AP

Nakatani. . . C A

This was the result of the hearing con-ducted by the House Committee on Transpor-tation on Wednesday attended by officials of the Department of Transportation and Com-munications, Civil Aviation Authority of the Philippines (Caap), Civil Aeronautics Board (CAB) and the Department of Public Works and Highways (DPWH).

Liberal Party Rep. Cesar Sarmiento of Catan-duanes, chairman of the House Committee on Transportation, said discussions on the use of CIA as the alternative air hub have been going on for years already, but nothing concrete has come out to this day.

“If you could assemble and meet and pres-ent a master plan, we could have it submitted to the proper authorities for immediate ac-tion,” Sarmiento told the transport officials. “To speed up matters, this committee would like the groups to present an action master plan,

considering Clark as an alternative airport to Naia to be submitted in January.”

Last Decemberthousands of passengers were stranded at Naia due to canceled or delayed flights as a result of the congestion. “We called this meeting in anticipation of December when we would celebrate the first anniversary [of the Cebu Pacific fiasco]. We welcome collecting the P52 million by way of fines. We don’t want that to happen again,” Sarmiento said. Aside from CIA, there were also proposals to develop Sangley Point in Cavite as the alterna-tive to Naia.

But Kambilan Rep. Joseller Guiao of Pam-panga said the CIA is the best substitute to Naia. He noted that the Clark Airport can ac-commodate as many as 4 million passengers per year. “Clark has the capacity of accommodating

4 million passengers, but right now only 1 mil-lion pass through the airport. The airport has the capacity to hold several flights,” he said. The lawmaker added that the airport can be reached with far less travel time—or one-and-a- half hours from Manila—than the two to three hours of travel to Naia due to heavy traffic along the roads to Naia.

He also called on the DPWH to build a direct access road to the CIA from the North Luzon Expressway (Nlex) to cut the travel time to the airport and promote it as one of the country’s premier gateways. He earlier admitted that one problem often cited why travelers and potential clients do not consider Clark is its distance, which is exacerbated by the lack of direct access from the Nlex. The lawmaker said one important support infrastructure that must be built is a direct access route to the airport from Nlex,

bypassing the busy and narrow roads of Ange-les City and Mabalacat City.

But CAB Chief Legal Officer Wyrlou Samodio admitted that more studies are needed before CIA can be used as an alternative to Naia. “It’s a long process we have to undergo before everything becomes feasible. Logistics-wise, it’s not easy to transfer people from one place to another. I think we have to take a thorough study, or at least prepare Clark before we trans-fer flights from Clark to Manila,” he said. Caap Director General William Hotchkiss said Naia can only accommodate 40 aircraft move-ments per hour. “We can only accommodate 40 flight that’s the safest we can assure. If that’s exceeded, the safety factor goes down.”

But Caap Supervising Air Traffic Control Officer Marlene Singson said there were days when the Naia exceeded the standard 40 move-ments per hour.

AS she celebrates her 10th anniversary in office, German Chancellor Angela

Merkel faces two crises. While the political fallout still is uncertain, in economic terms the positive impetus from European refugee influx is due  to more than offset the negative effect of the Volkswagen (VW) emissions- cheating scandal. 

Germany’s $7-B refugee boost to outweigh VW scandal fallout estimate in a Bloomberg survey of 24 economists, conducted from November 6 to 13.

The V W scandal ’s impact will be negligible, lowering 2016 growth by just 0.03 percentage point. Based on the International Monetary Fund’s October esti-mate of  nominal  German GDP, the combined impact  translates into roughly $6 billion in extra economic activity next year. “The public sector directly demands more goods and ser-vices to deal with the influx of refugees and the refugees themselves boost private de-mand as they also spend money in Germany,” said Stefan Kipar, an economist at Bayerische

Landesbank in Munich. “To sum up, the refugee in-

flux has effects comparable to an unplanned—economic stimulus program in the short run.”

The increased demands on public coffers to house and feed hundreds of thousands of refu-gees, however, means a planned budget surplus for 2016 has evap-orated, according to several econ-omists who participated in the Bloomberg survey.

The VW scandal’s impact is slightly harder to parse out. 

“Note that repairs are posi-tive for GDP growth, and that demand—domestic or foreign—that turns away from VW may shift to other German producers, thus,

being neutral for German GDP,” said Timo Klein, an economist at IHS Economics in Frankfurt.

This comes amid an apparent plateau in Germany’s recovery, with the economy forecast to expand 1.7 percent year-over-year in the fourth quarter and less than 2 percent annually through 2017, according to a separate Bloomberg survey.

W hi le the economics of Germany’s refugee dilemma  are straightforward enough, the poli-tics are anything but, with growing demands throughout the coun-try—and even  within Merkel’s own coalition—to curb migration in the wake of the deadly Paris ter-rorist attacks. Bloomberg News

The expected absorption  of some  800,000 asylum-seekers into Germany, many fleeing the

violence in Syria, will add 0.2 per-centage point to annual growth next year, according to the median

Clark plan. . . C A

By Sammy F. MartinPhilippines News Agency

INDEPENDENT cooking fuel refillers grouped under the L iquef ied Pet roleu m Ga s

Marketers’ Association (LPG-MA) on Wednesday announced a P3-per-kilo rollback in prices effective immediately. “Our new suggested retail price for LPG is now P460 per 11-kilo-gram cylinder, down by P33,” Party-list Rep. Arnel Ty of LPG-MA said. Ty, a senior member of the House Energy Committee, projects that the prices of LPG and other petro-leum products will likely stay de-pressed in the near term. “The downward pressure on the prices is still there, because global crude oil production con-tinues to outpace consumption,” Ty pointed out. Meanwhile, the House of Repre-sentatives has high hopes that the Senate will soon pass the proposed “An Act Establishing the Regula-tory Framework for the Safe Op-erations of the LPG Industry,” or Senate Bill (SB) 2897. The House approved its version

of the measure—HB 5617—on third and final reading in August. “We are grateful to our senators for their support. The last time we checked, SB 2897 is now pend-ing approval on second reading, with Sens. Paolo Benigno “Bam” Aquino IV, Loren Legarda, Jin-ggoy Estrada and Nancy Binay as authors,” Ty said. Besides protecting the interests and welfare of consumers, the pro-posed new law mandates rigorous standards meant to ensure the harmless importation, refining, storage, refilling, distribution, transportation and consumption of the cooking fuel. Moreover, the measure regulates the manufacture, requalification, exchange, swapping or improvement of LPG cylinders, and provides ad-equate strategies to guarantee that every tank coming out of a refilling plant has gone through painstaking security checks. “Once enacted, the measure will go a long way in preventing the un-necessary loss of lives and property due to accidental LPG explosions in residential, commercial and indus-trial settings,” Ty noted.

PHILIPPINE Red Cross (PRC) Chairman Richard Gordon on Wednesday called on the

Department of Environment and Natural Resources (DENR) and local governments to quickly survey man-ufacturing plants and warehouses harboring hazardous chemicals in Metro Manila and other population centers, following an industrial acci-dent beginning on Sunday afternoon in Quezon City, where toxic fumes escaped from the D&L Chemrez plastics plant in Calle Industria in Barangay Bagumbayan, and caused distress to surrounding residents in QC and Pasig City. In a statement, Gordon said re-sponding PRC workers and volun-teers who rushed to the scene on Monday after midnight to aid baran-gay residents near the plant had to seek medical attention afterward with two PRC workers taken to St. Luke’s Medical Center in QC for

checkup and further observation. Three other PRC volunteers were taken to the East Avenue Medical Center for arterial blood testing and chest x-rays. Gordon said QC and Pasig residents had cal led the PRC Operations Center seeking help, owing to the chemical gas leak from the plant which had caused a foul and pervasive stench af-fecting them. PRC Opcen sent a four-man am-bulance team at 2 a.m. on Monday to link up with two other PRC medi-cal units and volunteers already aiding residents who evacuated to the Bagumbayan barangay hall. The PRC workers noted a per-vasive “ammonia-like” odor even at the evacuation center, despite the efforts of the QC firefighters who were continuously pumping water inside the Chemrez plant facilities in an attempt to dissipate

the noxious fumes. Three PRC tankers also topped up the fire hydrant reservoir with 30,000 liters of water to help en-sure enough water for the fire-fighters’ efforts. Because of the toxic environ-ment, the PRC units pulled back after several hours with workers complaining of severe headaches, respiratory distress and fever, the Opcen reported.

“As it stands, surrounding residents in QC and Pasig and our brave PRC workers and fire-fighters were exposed to hazard-ous materials. But the situation could have been much worse if the chemical storage facility had exploded. There would have been catastrophic loss of life affecting a wide area,” Gordon said. Gordon said government units should survey industrial plants and warehouses with hazardous chemicals near population cent-ers, and check if the storage and treatment of these materials met international safety standards. “There should also be stricter zoning of industrial plants and ware-houses with hazardous materials away from homes. An earthquake, fire or accident could cause great loss of life to residents even kilometers away from an industrial plant.” Claudeth Mocon-Ciriaco

QUEZON City policemen ar-rested two suspected drug dealers who yielded about

P9 million worth of methampheta-mine hydrocloride, or shabu, during an antidrug operation in the city on Wednesday morning. Chief Supt. Edgardo G Tinio, Que-zon City police chief, identified the suspects as Paul L. Co, Filipino, 44, businessman, of 27 Seminary Road, Bahay Toro, Quezon City and Arvin O. Caray, 38, family driver, of 2827 H. Santos, Tejeros, Makati City. Tinio said a team from the Dis-trict Anti-Illegal Drugs-Special Op-erations Task Group (DAID-SOTG) headed by Chief Insp. Enrico Figuer-oa, and District Special Operations Unit (DSOU) headed by Supt. Jay Agcaoli, collared the suspects at the corner of V. Luna Avenue and Mapagbigay Street, Piñahan, Que-zon City, at about 5:45 a.m. The lawmen seized from the duo about 3 kilos of suspected shabu with a street value of P9 million. Tinio said the operation fol-lowed two weeks of investigation and surveillance. Aside from the 3 kilos of shabu, police operatives seized from the suspects a Suzuki Swift car with license plate JTS-88, three cellular telephones, and P10,000 in P1,000 bills which were incorporated in the “boodle money” to make up the agreed purchase price of P1 million for a kilo of the drug. PNA

APO Production Unit, the offi-cial government

printer of the recently launched “sin tax” or excise tax stamps, won the top awards for Best Design and Best Tax Stamp Program in the prestigious interna-tional awards for Ex-cellence in Tax Stamps. The same entr y re-ceived a commendation in a third category, Best New Innovation. The 2015 winners were announced and awarded during a cer-emony held as part of the Tax Stamp Forum, which took place in Miami, Florida, US, attended by 250 international delegates. The Excellence in Tax Stamps award recognizes outstanding contributions by individuals and or-ganizations in tax stamp design, technological in-novation, and implementation and enforcement in tax stamp programs. Each of the three awards cat-egories highlights the important role that tax stamp programs play in combating illicit trade and protect-ing tax revenues. APO’s 2014 Philippine Excise Tax Stamps was sole winner in the Best Design Award and shared top honors with Best Tax Stamp Program with the Turkish Revenue Authority (Banderol Product Tracking System). The same entry received a commendation in the third category, Best New Innovation. Present to receive the awards during the Miami Tax Stamp Forum, held from November 11 to 13, was the APO Production Unit delegation led by APO President Amando C. Dimarucot Jr. and Executive Vice President and General Manager Jaime H. Aldaba.

The 2014 Philippine Excise Tax Stamp program was designed and implemented by the APO Production Unit in fulfillment of the Philippine sin tax law (Republic Act 10351), enacted in December 2012. Under the law, revenue generated from the tax would be used to fund government health-care programs. To aid the implementation of the sin tax law, APO took the challenge of revolutionizing the excise tax stamp to meet the government’s requirements. Employing innovative technologies, APO developed a stamp design reflecting the Philippine heritage, into which was introduced various overt, covert, and forensic security features. Owing to the stamp’s functional design and nonintru-sive nature, taxpayers readily adopted its use, resulting in a 95-percent market penetration. APO has also adopted for country’s tax stamp pro-gram the Internal Revenue Stamp Integrated System, a Web-based application that manages the ordering, production, distribution, affixing and tracking of rev-enue stamps.

Deputy Presidential Spokesman Abigail Valte, reporting on the pro-ceedings on Day 1 of the tribunal’s hearings on the merits, said Solicitor

General Florin Hilbay first outlined the sequence of arguments to be pre-sented by the Philippine panel. “The thrust of the presentation

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Thursday, November 26, 2015 A3BusinessMirrorThe Nation

of the Philippine side today focused on the lack of basis for China’s his-toric claims over the nine-dash line,” Valte, who attended the hear-ing, said in an e-mail to Palace re-porters on Wednesday. She added that the government’s lead counsel, Paul Reichler, dis-cussed “the nature of China’s his-toric rights claim and how these pur-ported historic rights, supposedly derived under the United Nations Convention on the Law of the Sea [Unclos], in fact, do not exist under the provisions of the convention.” At the same hearing, Valte said Philippine counsel Andrew Loe-wenstein argued that “even as-suming, for the sake of argument, that a claim of historic rights can exist after the Unclos, China has failed to satisfy the requirements to establish the claim, namely: a continuous exercise of exclusive control for a long period of time over the said area.”

“Loewenstein presented eight maps, the first of which dates back to the Ming Dynasty, to show that China’s territory did not include that which it claims now under the nine-dash line,” Valte reported. She said Reichler questioned China’s assertion of exclusive rights over the areas covered by the nine-dash line, airing Presi-dent Aquino’s earlier protesta-tions in other forums, including the recent Asia-Pacific Economic Cooperation summit in Manila, that this has “deprived the Phil-ippines of fishing and exploration activities.” Valte said that during the initial hearings of the tribunal, Bernard Ox-man also tackled the “unlawfulness of China’s claim to the South China Sea beyond its maritime entitle-ments under the Unclos and how it encroaches on the rights of coastal states like the Philippines.”

PHL to UN arbitral tribunal: China’s 9–line claim baseless

THE Philippine panel zeroed in on the “baseless” nine-dash

line claim of China over most of West Philippine Sea (South China Sea), showing as evidence Ming Dynasty-era maps to belie this, as

the United Nations Arbitral Tribunal began hearings this week on the case filed Manila against Beijing.

Cooking gas prices cut by ₧33 per tank

By Butch Fernandez

QC cops seize ₧9 million worth of shabu

PRC pushes inspection of factories, warehouses in urban areas

hilbay

APO bags international award for ‘sin tax’ stamp program

THE Kabataan Party-List group on Wednesday asked the Supreme Court (SC) to

declare the “No Bio, No Boto” policy of the Commission on Elections (Comelec) unconstitutional. In a 32-page petition for certio-rari and prohibition, the Kabataan sought for the exercise of judicial review to assail the constitutional-ity of the deactivation of the regis-tration of voters without biomet-rics and enjoin the implementation of provisions of the Republic Act (RA) 10367, or “An Act Providing for Mandatory Biometrics Voter Registration.” The group also sought for the nullification of Comelec Resolu-tion 9721 dated June 26, 2013, Resolution 9863 dated April 1, 2014, and Resolution 10013, that are all related to the deactivation of voter registration records in the May 9, 2016, elections, as directed by the assailed RA 10367. Assisted by lawyer Krissy Con-ti, petitioners include Party-list Rep. Terry Ridon of Kabataan and Kabataan President Marjohara Tucay, who are suing for and in behalf of the youth party, along with Sarah Elago, president of the National Union of Students of the Philippines; Vencer Crisos-tomo, chairman of Anakbayan; Marc Lino Abila, national presi-dent of the College Editors Guild of the Philippines; Einstein Re-cedes, deputy secretary-general of Anakbayan; Charisse Bañez, chairman of the League of Filipino Students; and aggrieved parties Arlene Clarisse Julve and Sining Marfori, both of whom stand to lose their right to vote owing to the assailed law and implement-ing regulations. “Republic Act 10367 and its implementing regulations are unconstitutional as these im-pose an unconstitutional, addi-tional substantive requirement on the exercise of suffrage, thus violating Section 1, Article V of the 1987 Constitution,” the pe-titioners said. They noted that the 1987 Constitution explicitly states that “[n]o literacy, property, or other substantive requirement shall be imposed on the exercise of suffrage.” “In contravention of the above-stated constitutional provision, Republic Act 10367 and its imple-menting regulations imposed an

additional substantive require-ment for all voters, both old and new registrants, to submit for mandatory biometrics valida-tion or risk being deactivated or removed precinct book of voters, thus effectively barring them from the exercise of their right to vote,” they added. “Further egregious is the fact that voters with active records according to Republic Act 8189, the antecedent Voters Registra-tion law of 1996, comprise bulk of those who will be deactivated. The deactivation of registered voters qualified under Republic Act 8189 is incompatible with the tenet that laws with penal sanctions should apply prospectively and not retro-spectively,” they said. “Secondly, the biometrics vali-dation gravely violates due process as it is an unreasonable deprivation of the constitutional right to vote for millions of Filipinos who have failed to register their biometric information despite existing and active registration—in effect a voter’s re-registration—for vari-ous reasons whether personal or institutional,” they added. The petitioners noted that de-spite Comelec’s “No Bio, No Boto” campaign, official data from the Comelec showed that only 3,599,906 registered voters have undergone the mandatory bio-metrics validation procedure as of September 30, 2015. The Comelec also revealed that a total of 3,059,601 registered vot-ers remain without biometrics data as of September 30, 2015. According to the Comelec, this figure is equivalent to 5.86 percent of the total 52,239,488 registered voters for the 2016 national and local elections. “It is, thus, apparent that over 3 million registered voters stand to illegally lose their right of suffrage in the May 9, 2016, national and lo-cal elections without the benefit of due process, due to the implemen-tation of an additional requirement that is patently unconstitutional,” the petitioners argued. Just last month, the Kabataan Party-list group and several youth groups also filed a petition before the SC to question the October 31, 2015, deadline for voters’ registra-tion set by the Comelec. The SC has already ordered Comelec to comment on the said petition. PNA

Group asks SC to declare Comelec’s‘No Bio, No Boto’ unconstitutional

GORDON: “as it stands, surrounding

residents in QC and Pasig and our brave

PRC workers and firefighters were

exposed to hazardous materials. but the

situation could have been much worse if

the chemical storage facility had exploded.

�ursday, November 26, 2015 BusinessMirrorA4

�eBroaderLookAPEC 1996 WAS SUBIC’S DEFINING MOMENT

Part of the preparation for the event was the construction of 18 luxury villas for the visiting Apec leaders that included US Presi-dent Bill Clinton, and the build-ing of a summit hall overlooking Subic Bay. The villas had since been sold to private buyers, while the conference venue remained unused in what is now part of a residential enclave.

Still the memories linger. But more than the pomp and pag-eantry that attracted thousands of residents of Olongapo City, Zambales and Bataan to Subic for a welcome party that repli-cated the sights and sounds of a Filipino fiesta, there was a sense of purpose, of a community want-ing to deliver, says Carlos Andres, SBMA media relations officer who served as event volunteer for Apec 1996.

“It felt like we were one, that everyone has some stake in that undertaking and that we wouldn’t want to fail,” Andres recalls. “That was definitely Subic’s biggest day—something that made us very, very proud.”

Andres remembers most of all the sight that made headlines everywhere, when the 18 world leaders lined up along the con-ference venue at Subic’s Crown Peak area—resplendent in their native Barong Tagalog, waving to photographers with the blue Subic Bay serving as background.

“It was a heady experience,” adds Jonas Reyes, also a volunteer SBMA worker in 1996.

Reyes recalls how then-SBMA Chairman Richard Gordon con-stantly prep up the volunteer workers, boosting their spirits af-ter working day and night to pre-pare for the high-profile event. He

also recalls the huge banner hung in front of the SBMA main office along Waterfront Drive that said, “It’s Our Time.”

“The banner was so huge that the world leaders meeting at Crown Peak across the bay could not miss it,” Reyes recalls. “And that basically summarized it all—Subic was telling everyone that it was its time, that it’s ready for the entire world.” ‘Coming-out party’SUBIC’S hosting of Apec 1996 was the defining moment for the then-f ledgling special economic zone. “That was when Subic re-alized its potential, that it can be a player in the world stage, and that it can rise from the ashes of the Pinatubo eruption and succeed as an economic en-terprise,” recalls Amethya de la Llana, head of the SBMA Plan-ning and Development Office.

De la Llana says that what Andres and Reyes refer to as Subic’s “coming-out party” had, in fact, set the direction that the SBMA, which manages the Subic Bay Freeport, would take in the years to come.

SBMA figures indicate that Apec has provided Subic with the much-needed exposure to multi-national companies, as well as to local investors who would set up shop in the area because of its accessibility, strategic location, available facilities and excellent security—Subic’s plus factors that were amply highlighted dur-ing the Apec summit.

According to the SBM A, a number of g loba l companies located in Subic after the 1996 Apec event. These include:  Hi-tachi, a Japanese multinational

conglomerate that is listed on the Tokyo Stock Exchange and is a constituent of the Nikkei 225 and Topix indices, ranking 38th in the 2012 Fortune Global

500 and 129th in the 2012 Forbes Global 2000; Nidec Corp., an-other Japanese firm, which is currently the world ’s No.1 com-prehensive motor manufacturer;

and Sanyo Denk i , a Japanese m a k e r o f i n d u s t r i a l f a n s , which is an overseas manu-factur ing subsid iar y of Sanyo Denk i Co. Ltd. O f cou rse, t he

Subic Bay Fre e p or t i s home to H a nj i n ,   a S out h K ore a n conglomerate whose sh ippi ng c o mp a ny i s K ore a’s l a r ge s t a nd one of t he wor ld ’s to p

The traditional photo opportunity for Apec leaders at the Subic Bay in 1996.

APEC  summit hall APEC  villa

B H E

SUBIC BAY Freeport—Employees of the Subic Bay Metropolitan Au-thority (SBMA) can still vividly

recall the day 19 years ago when Subic welcomed 18 heads of state and proved to the world that it can host a prestigious event such as the Asia-Pacific Economic Cooperation (Apec) summit meeting.

BusinessMirror A5www.businessmirror.com.ph | �ursday, November 26, 2015

�eBroaderLookAPEC 1996 WAS SUBIC’S DEFINING MOMENT

10 cont a i ne r c a r r ie r s , w hos e sh ip y a rd i n Su bic B ay Fre e -por t feat u res t he world ’s t wo l a rgest d r y doc k s.

The Subic Bay Freeport is also

hosting Vale SA, a Brazilian mul-tinational diversified metals and mining corporation and one of the largest logistics operators in Brazil, with a global presence

in five continents. Vale, which is considered the leader in the production of iron ore and the largest producer of nickel, cur-rently uses the Port of Subic as

its Asian hub for its iron ore-transhipment operations.

Other Subic locators include Philip Morris, a global cigarette and tobacco company whose

state-of-the-art tobacco-stor-age faci l ity in Subic Bay Free-port is expected to become its largest warehouse in Southeast Asia; Lindberg, a Danish mul-tinational f irm that has revo-lutionized the eyewear busi-ness—from design, materia ls and manufacture to sales—us-ing l ightweight titanium; and C reste c Co. , a mu lt i l i ng u a l document engineer ing global company with 11 branches in Japan and 19 branches in 11 countries around the world.

 With the arrival of foreign in-vestors, as well as Filipino compa-nies that are mostly engaged in the tourism and services industries, Subic’s gross revenues exponen-tially soared after it hosted the Apec summit, dwarfing its per-formance in the first four years after the free port was converted into a special economic zone from a military base.

Thus, from a gross revenue of just P800 million in 1996, SBMA’s income rose to P1.18 bil lion in 1997; P1.56 bil lion in 2001; and P1.67 billion in 2009. From there, the SBMA chalked up P2.02 bil lion in 2013 and P2.44 bil lion in 2014.

  Similarly, the Subic agency recorded growth in its Ebitda (earnings before interest, taxes, depreciation and amortization) from P361 million in 1996, to P589 million in 1997, P750 mil-lion in 1998 and P869 million in 2001. Although Subic’s Ebit-da weakened from 2002 to just P240 million in 2007, it soon gained new ground, climbing to P920 million in 2013 and P1.39 bil lion in 2014.

Continuing momentumFROM the substantial growth surge it experienced after the Apec hosting, Subic went on to capitalize on the momentum to attract more investments, employ more workers and generate more income. And because of its innate attractiveness as an investment site, the Subic Bay Freeport Zone as of 2014 had about 1,500 busi-nesses, more than $9.1 billion in investments, and a total work force of 96,958.

SBMA Chairman Roberto Gar-cia, who is credited for SBMA’s outstanding fiscal performance in the past three years, said that the best is still to come for Subic,

as it expects a cumulative invest-ment of about $9.5 billion by year-end, as well as some 100,000 in total free port employees. At the moment, Garcia said the SBMA “is the largest and most progressive free port operator,” the others being the Philippine Economic Zone Authority (Peza), Clark Development  Corp. (CDC), Cagayan Economic Zone Author-ity (Ceza) and Authority of the Freeport Area of Bataan (Afab).

Garcia said that while the SBMA currently has total assets of P28.08 billion, Peza has only P5.97 billion and Cdc, P5.72 billion.

In terms of equity, the SBMAhas P16.97 billion, Peza has P4.25 billion, and CDC has P3.49 billion. In terms of revenues, SBMA has P2.95 billion; Peza, P7.97 billion; and CDC, P1.3 billion.

In terms of net income, SBMA also leads with P1.11 billion over Peza’s P1.03 bil l ion and CDCP331.73 million.

Ceza and Afab both have con-siderably smaller totals for assets, equity, revenue and net income. ContributionsAS an income-generating entity, the SBMA is now contributing signif icant ly to the national economy. Garcia said that as of 2014, the agency contributed P15.3 billion through its Customs collections; a total of P1.8 billion in internal-revenue collections; P298 million in shares remit-ted to the national government; P199 million in shares given to local government units; and P243 million in dividends.

The P17.84 billion it raised in 2014 was 38 percent higher than the P12.96 billion it remitted in 2013. Garcia said the SBMA expects to outdo its sterl ing performance in the last three years by undertaking strategic measures, such as: moving from overregulation to developmen-tal mode; expanding the free port area to accommodate more investors; capitalizing on the Philippines’s economic boom via aggressive marketing of the free port; focusing on game-changing projects; and institutionalizing good-governance initiatives.

Subic has come a long way since its establishment in 1992, but that event in 1996 had set the tone for its undertakings and accomplishments.

APEC  villa

Thursday, November 26, 2015 • Editor: Angel R. Calso

OpinionBusinessMirrorA6

Apec hosting: A second look

editorial

To host international events like the recently concluded Asia-Pacific Economic Cooperation (Apec) Leaders’ Meeting and CEo Summit requires meticulous planning, impeccable or-ganization and painstaking attention to detail. The primary

goal is to ensure the safety and comfort of all visiting head of states, top honchos of global companies, foreign scribes and other guests.

How did the Philippines fare on its second Apec hosting? Was Apec 2015 worth the sacrifice of thousands of travelers stranded in Manila and elsewhere due to canceled flights, and the ordeal endured by countless commuters who were forced to walk to their destination when Metro Manila roads were closed?

one way to assess the country’s Apec hosting performance is to listen to comments on social media, where netizens gave mixed reviews that can be summed up in this comment: “For the delegates, we did good. For the people, we were beyond terrible.”

Another way is to listen to foreign journalists who covered the event. A story that the BusinessMirror published on Monday captured the general sentiment of the visiting scribes who said the warmth and hospitality of Filipinos—from the staff who assisted them in Apec meet-ings to the people they met on the streets—made their stay in the country more pleasant.

A Canadian journalist had nothing but good words for us: “I find Filipinos very welcom-ing and very warm, compared to people in Canada and North America. In Canada we’re a bit more reserved. It’s a very nice change to see and to feel the warmth of the Filipino people.”

“Filipino hospitality is very much appreciated. The service here is very good, especially at the International Media Center. Members of the staff warmly greet you and say hello with a big smile,” a Chinese journalist said.

However, foreign journalists are brutally frank when they talk about the traffic conges-tion in Metro Manila. outside of Pasay and Makati cities where the Apec Leaders’ Meeting and CEo Summit were held, traffic in other parts of the metropolis became unmanageable when roads were closed. Some foreign scribes who got stuck in traffic offer these words to describe the situation—“terrible” and “awful.”

A Chilean journalist who works for Diario Publimetro told the BusinessMirror: “I was surprised about the traffic. It was really a problem to go from point A to point B. Traffic was awful. But aside from that, everything is okay here.”

Surely, there are inconveniences and difficulties attendant to staging a high-profile event like Apec 2015. The strict protocol required in securing visiting heads of states is just a part of the tremendous task. For this, the Joint Task Force Apec Security, led by the Philippine National Police, deserves a grand salute. The 30,000 police officers, soldiers and emergency personnel who took part in securing the forum deserve the highest commendation. Securing Apec became more daunting in the wake of the fatal terrorist attacks in Paris a few days before the event.

Foreign observers agree that the Philippines did well in hosting the regional summit. For doing a good job, Filipinos deserve a pat on the back.

The term “black swan” is supposed to refer to those events that are completely unforeseen and, therefore, cannot be planned for. There are very few of these sorts of events.

Much more common are the “hidden lion” occurrences where you know the event is hiding in the bushes but ignore the possibility and, therefore, do not prepare.

By Bruce Ackerman | TNS

IN calling for a war against the Islamic State (IS), French President François hollande is engaging in a tragically counterproductive enterprise. Under international law, “war” can only exist

between sovereign states. hollande is rashly giving the IS precisely what it wants: legal recognition.

Philippine black swans–2016

François Hollande’s risky war talk

As the year comes to an end, large financial institutions sit down and try to figure which “swans” or “lions” may be coming and what prepara-tions might be made.

As I have written, there have been many political “surprises” this past year that were to be expected as the long-term political cycle changes. This cycle mandates that voters across the world will reject the sta-tus quo and sometimes turn 180 degrees from the current political regimes. Canada went from “right” to “left” even as Argentina just moved from “left” to “right”. Many of these changes caught the establishment completely off guard.

French international banking firm, Société Générale (SocGen), re-cently released its list of black swans or hidden lions for 2016.

The event given the highest prob-ability at 45 percent is that Great Brit-ain will vote to leave the european

Union (eU) in 2016. The significance of this event in practical terms for both Britain and the eU (for exam-ple, Britain no longer being subject to the eU rules on food conformity) is not as important as the message it would give to other eU members. Membership in the eU is supposed to be like joining the Mafia. Once you get in, you cannot get out. how-ever, if Britain does vote to opt out, moves in other nations where there is a growing desire to quit would gain respectability and credibility.

China experiencing an economic “hard-landing” is second at 30-per-cent likelihood. economic-types use the term “hard-landing” to de-scribe a situation where excesses in the economy, like a too large a debt burden, cause a sudden crash. But even SocGen says that a Chinese hard-landing would be more like a slow no-growth collapse unless the Chinese government makes some

Such a move would not only repre-sent a profound defeat for the West in the war of ideas; it would also have im-mediate practical consequences. If the French succeed in capturing terrorists, must they treat them as prisoners of war, entitled to all the rights guaranteed by the Geneva Convention?

This is precisely the question the US has confronted at Guantànamo. To avoid the Geneva Convention, the Bush administration called its internees “unlawful combatants” since they were not fighting in military uniforms. Will France create a similar “no-law zone” when dealing with terrorists, and act lawlessly while denouncing the IS for its lawlessness?

history has its ironies, yet this one is too terrible to contemplate. Recall that French President Jacques Chirac refused to enlist in the worldwide “war on terror” at the time of the Iraq inva-sion. By standing aside, he saved France

from complicity with the torture and lawlessness that have damaged the in-ternational reputations of the US and Britain. But, rather than following in Chirac’s footsteps, hollande is now endorsing indiscriminate war talk at a time when President Barack Obama and British Prime Minister David Cameron have been cautiously extricating them-selves from the legacy left by George W. Bush and Tony Blair.

Worse yet, it is all too likely that the West will lose the “war” that hollande seems to want. After military defeats in Afghanistan and Iraq, the US and British publics will not support an-other massive ground invasion in the Middle east. Despite the bellicosity of some GOP candidates, there is broad support for Obama’s recent statement making it clear that no such invasion is in the offing.

War is not winnable without West-ern ground troops. After all, the Obama

sort of huge policy error. Third on SocGen’s list is that con-

sumers in the West will suddenly start doing the unthinkable—save money instead of spend. Although economic growth in the US and eu-rope is well below annual averages for the past decades, what little growth there is has gone to buying things. If consumers start saving for the future and not buying for the present, even the current feeble economic growth could disappear. If this happens, all the current economic forecasts for 2016 will have to be thrown away.

here in the Philippines we tend to focus on the obvious rather than on the unlikely. earthquakes, typhoons, and China are where most of our “black swan” thinking center. None of those issues are swans or lions. We can prepare for natural disasters even if the timing is unknown. An exclamation with China over the ter-ritorial claims unfortunately must be placed in the “We’ll cross that bridge when we come to it” file. If, for example, a Filipino fishing boat is sunk by a Chinese naval vessel, there is not much we can do to prepare for it. Further, there is not much we can do to prevent it.

While the presidential and na-tional elections in May 2016 are already caught in controversy over the eligibility of Grace Poe and now Rodrigo Duterte, I see a potentially greater problem lurking. What if, for example, there were serious, widespread, and valid concerns over the results? We always think about

anomalies in Philippine elections as due to fraud. however, as the voting process become more automated, technology breakdowns are more likely to happen. Certainly the first thought would be cheating, just like I always think my Internet is down because SKYCable hates me in par-ticular. But sometimes, technology just breaks.

While everyone is thinking and greatly concerned about a stock- market crash, what if the opposite happened? Assume for the moment global conditions suddenly turned in a manner that foreign investors rushed to come into the Philippine stock market. Although local inves-tors might think this as a Divine gift, a sudden “boom” could be as chaotic as an event of sudden “doom”.

Stock markets function better when trends are established over time and, therefore, become sus-tainable. Very rapid stock-market price crashes and upside price surges are more like a department store’s “Midnight Madness” sale. Buying or selling on price movements may not be sensible in regard to the trends.

No doubt there are other animals prowling around the Philippines waiting for 2016 to come.

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

administration has already tried and failed to fill the gap by funding the de-velopment of powerful moderate Arab ground forces. Last month it abandoned its half-billion-dollar initiative after finding that it had created only a hand-ful of combat-ready troops while allow-ing the IS to obtain advanced American weapons through corrupt deals with “moderate” leaders.

hollande’s war talk, besides, is en-tirely unnecessary for decisive action. The French Constitution authorizes the president to exercise extraordinary pow-ers whenever the country’s institutions are under “grave and immediate threat,” including sweeping preventive detention measures. hollande is proposing a formal amendment to make it easier to invoke this provision. And in the meantime, he has persuaded the legislature to pass a statute granting him interim powers.

Rather than lashing out abroad, it makes far more sense to crack down domestically.

Wars are open-ended; once they start, it’s difficult for citizens to control their government’s actions. In contrast, the French Constitution’s grant of emergen-cy powers is more limited, lasting only 60 days. At that point, the president must convince the country’s Constitutional Council that the threat continues to be

“imminent”. even if he succeeds, the council is under a continuing obligation to rein in the president “at any moment” if it determines that the risk has returned to more normal levels.

These sunset clauses allow France to make a vital distinction between imme-diate and long-term responses to terror-ist tragedies. In the near term, drastic measures—short of torture—may well be reasonable to disrupt networks that have successfully eluded the security ser-vices. In the longer term, sunset clauses help prevent these emergency measures from developing an institutional mo-mentum of their own.

Without them, security services may feel emboldened to transform a state of emergency into the “new normal.” They may demand even harsher measures when the “new normal” fails to prevent another terrorist attack.

Safeguards must be preserved when parliament turns to consider hollande’s plan to amend the Constitution. Par-liament should insist on strong sunset clauses that will guarantee the survival of France’s great tradition of civil lib-erty. It should not allow the prevailing panic to create a system that threatens, over time, to destroy the basic freedoms that distinguish the West from its ideo-logical competitors.

OUTSIDE THE BOXJohn Mangun

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Nato confronts Russian base on Turkey’s border

Waiting for the Lord

God teaches the humble His way. And he waits for Him all the day (Psalm 25:4-5, 8-9, 10, 14). Be vigilant at all times; stand erect and raise your heads because your salvation is

at hand (Luke 21:25-28, 34-36).

Lord, teach me your pathsTHe psalmist entreats God for guid-ance, begging to be taught His ways and His paths. He is keen to do God’s will, hence he earnestly wants to learn God’s “ways”, “paths”, “truth”; he asks to be given knowledge, to be taught, to be guided. He desires to have a lifestyle in conformity with the divine will or with the ways taught by God. He seeks to go on the road of righteousness in God’s sight; he begs for wisdom and insight in God’s ways. For it is from God that salvation comes; down God’s paths salvation is accomplished. It is worth to wait for the Lord, savior and de-liverer, all the day long.

The psalmist appeals to God’s covenantal commitment of old: His tender compassion (rahum, deep and loving attachment as between a mother and the child in her womb) and His loyal kindness (hesed). He prays that God considers him in mercy and kindness, not mindful

of his sins. It is because God is good and upright that He shows sinners the path to salvation. Similarly, it is because God is compassionate and merciful that He guides the poor and humble ones (anawim) to justice and teaches God’s ways and to walk along His paths.

Salvation is at handevAnGeLIST Luke wants to guide his readers regarding the final ad-vent of Jesus Christ. He was writ-ing to second- and third-generation Christians of a growing Church of many languages and cultures spread throughout the then known world. The earlier expectation of the believ-ers for an imminent Parousia of the glorious Jesus has been replaced by the realization that the Church is here to stay to continue the work of Jesus. And others may be in fear and anxiety about the end, not so with Christians who wait in joy-filled ex-pectation for the return of the Lord.

The faithful ones stand erect with heads raised when the Son of Man comes in glory, because redemption is at hand.

The references to cosmic distur-bances and the consequent distress on earth are not historical predic-tions but apocalyptic metaphors signifying the end of one age and the birth of a new one. It is really about new creation, rather than sheer de-struction. It calls to mind the pri-mordial chaos out of which order was brought forth by the divine power. It is a theophany, the coming of the Son of Man and the time of salvation from God. It will be the “day of the Lord”, the day of His power and glory, of His judgment and mercy. It is the day as well of the victory of those who have remained faithful to Him and who can therefore stand before Him to receive the fullness of God’s goodness and love.

Be vigilant at all timesIT will be the advent of the age of ful-fillment, therefore one must be pre-pared for it. “Be vigilant at all times and pray” that one be alert, heedful and not surprised. When everything is collapsing, it is vital for survival to be standing on a higher, solid ground. It will mean everything then that one has been properly guided as to what is passing and perishable, and what is essential and everlasting. The ways and values taught by Jesus during His ministry and passed on in His Gospel will be revealed as the basis

for anyone’s victory or failure.do not be caught by surprise! Be

alert! Beware! Take heed! extraor-dinary signs notwithstanding, the exact time of the revelation is un-known. one must not take chances when it concerns the coming of the Lord and one’s own eternal salva-tion. Believers can only stand erect and raise their heads in welcoming the Lord to the extent that they have avoided all ways and style of living contrary to the Gospel, in senseless, drunken indulgences, or in mindless preoccupation with the anxieties of daily life.

Alálaong bagá, as we begin the

season of Advent and expectation, we are reminded that a true “Advent Way of Life” means having learned of God’s ways, being taught of God’s paths, being guided by God’s truth, and waiting for the Lord all the day long, as the psalmist wishes for him-self as he lifts his soul to the Lord. The Advent way, which enables one to escape the tribulations when they come anytime anyhow and to stand before the Son of Man in hope and confidence, calls for Gospel-based lifestyle of making Jesus present in our lives here and now, not only anticipating but already incarnating his coming.

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

AlálAong BAgáMsgr. Sabino A. Vengco Jr.

Microfinancing VAT

one of the main focus of the Asia-Pacific economic Cooperation (Apec) summit is the growth of the small and medium enterprises (SMes) as part of its thrust for

inclusive growth. Increase in GdP will only have meaning for the poorest of the poor, if it is felt by them. economic growth can be said to have trickled down if a barangay’s sari-sari store is full of merchandise to sell; if a driver is finally able to afford his own tricycle, even if it is only payable in installment; if many small businesses are starting, thriving and innovating.

By Josh Rogin | Bloomberg View

WHen Turkey shot down a Russian jet on Tuesday, north Atlantic Treaty

organization (nato) was facing its worst fear: a direct confrontation with the Russian military. The prob-lem on nato’s southern border is much bigger than this one incident; the new Russian base near Turkey presents a larger strategic challenge for the alliance that if ignored could lead to ongoing clashes.

Two days ago, Petr Pavel, the chairman of the nato military com-mittee and top military adviser to nato’s secretary-general, warned me

about the long-term implications of the new Russian airbase in Latakia, Syria. The Czech general did not know then that the Russian presence in Syria would cause an international crisis so soon. But he already knew that nato needed to figure out a comprehensive policy to push back against Russia’s new base.

Pavel said that the base is not just intended to prop up the regime of President Bashar al-Assad in Syria.

“of course it is one of the objec-tives of Russian activities in the Middle east, not to just to support Assad’s regime, but also to get their forces into the area, have presence, and through this presence exert some

influence,” Pavel told me at the Hali-fax International Security Forum.

He said the base in Latakia was part of a broader Russian policy to increase its permanent military pres-ence on several of nato’s borders. This installation serves the Russian agenda in Syria while also attempt-ing to deny nato access to this area.

“There are different ways nato can react,” Pavel said. Facing Rus-sia’s attempt to impose anti-access, area-denial capability near Turkey, he said, “the most brutal way of how to resolve the issue…is to suppress it.”

But using military assets to chal-lenge Russia’s new protected zone around its base would take a lot of

resources and carries risks of fur-ther confrontation, he warned. Pavel would rather that nato use less “bru-tal” tools to bear against Moscow.

“We can use different kinds of pressures, starting from political, diplomatic, economic and also mili-tary in other areas, rather than push-ing through the wall,” he said.

Pavel predicted two days ago that nato would have to meet to discuss the Russian presence in Latakia soon. He was right. nato will hold an emer-gency meeting on Tuesday to discuss the Turkish downing of the Russian jet. At the top of the agenda will be determining just what happened in the skies over the Syria-Turkey

border on Tuesday. The Turkish government issued a statement say-ing the Russian jet entered Turkish airspace over the town of Yayladagi, was warned 10 times in five minutes, and then was shot down. The Turkish Foreign Ministry said that the issue was not only Russian incursion into Turkish airspace. The Turkish gov-ernment had been protesting what it says were Russian attacks on Turk-men villages on the Syrian side of the border, whose citizens Ankara feels a responsibility to protect because of their Turkish heritage.

Russian President vladimir Pu-tin reacted angrily to the incident and called the Turkish government

“accomplices of terrorists,” accusing Ankara of supporting radical Syrian rebel groups. Russian Foreign Minis-ter Sergei Lavrov canceled a planned Wednesday visit to Turkey. escalat-ing tensions, Syrian rebels  report-edly used a US-provided ToW anti-tank missile to shoot down a Russian rescue helicopter as well.

The clash between Russia and Tur-key is destabilizing, but the real de-stabilizing move was Putin’s decision to place a new power-projection and access-denial base just miles from a nato country without any consulta-tion. nato chose not to deal with that dangerous situation for months. now the alliance has no choice.

HAS vladimir Putin finally overreached? The Russian president is confronting several simulta-

neous crises. over the weekend, Ukrainian activists blew up high-voltage transmission towers and cut off electricity sup-plies to Russian-held Crimea. In Saint Petersburg, his home city, on Tuesday a column of 600 heavy trucks was crawling toward the city government building to protest tolls on Russian roads (a son of a close Putin friend has a financial interest in the system). And on the Turkey-Syria border, the Turkish air force downed a Russian bomber.

The Apec leaders recognize the importance of SMes’ access to fi-nance as a key enabler of expan-sion to the marginalized sector. To achieve this, our government should widen various financial options for SMes, including non-traditional and innovative fi-nancing, especially microfinanc-ing. Recognizing that SMes’ access to finance is a cross-cutting issue, there should be efforts for closer collaboration with relevant public and private sector institutions, including the Bureau of Internal Revenue (BIR) and the Bangko Sentral ng Pilipinas (BSP) in dis-cussing ways to widen access to finance and business resilience among SMes.

The most popular means by which the poor has access to cash is through microfinancing. It is defined by Republic Act 8425 as a credit and savings mobilization program exclusively for the poor to improve the asset base of house-holds and expand the access to sav-ings of the poor. It involves the use of viable alternative credit schemes and savings programs including the extension of small loans, simplified loan application procedures, group character loans, collateral-free ar-rangements, alternative and repay-ments, minimum requirements for savings, and small denominated savers’ instruments.

But this scheme is not free of tax. Just recently, the Court of Tax Appeals (CTA) has ruled that microfinancing is not different from the business of commercial lending for profit. The court said that while it is true that a corpora-tion or, specifically, a “civic league or organization not organized for profit but operated exclusively for the promotion of social welfare,” is exempted from income tax, the same cannot be said with regard to its value-added tax (vAT) liability.

otherwise stated, a micro- finance company is exempted for taxes on income. It cannot be gain-said about its vAT liability. Since microfinancing is an act of lending money at interest, then it is a lend-ing investor, subject to the imposi-tion of vAT (CTA 8480).

According to the court, the law does not even distinguish micro financing from commercial lend-ing. The present law merely stresses that even a nonstock, nonprofit organization or government entity is liable to pay vAT for the sale of goods and services.

The law expressly provides that for a taxpayer to be exempt from vAT, the transaction must be one

of those enumerated in Section 109 of the Tax Code. Undeniably, microfinancing is not one of those transactions enumerated therein.

But if a microfinancing company will be considered by the BSP as a nonbank financial intermediary like money changers and pawn-shops whose transactions are ex-empt from vAT, pursuant to Sec-tion 109 (U), then microfinancing will thrive.

In the case cited above (CTA 8480), however, the court noted that although the articles of in-corporation states that among the corporate purposes of the micro-financing company is, “to provide access to economic, financial, so-cial and other developmental op-portunities to small, cottage and micro-entrepreneurial sector of society…” it cannot be considered as “other nonbank financial in-termediary” simply because it was not able to show that it has been authorized by the BSP to perform quasi-banking functions. Because of this flaw, the microfinancing company in this case was ordered to pay around P70-million-plus interest and surcharges.

Based on this decision by the CTA, if the BSP recognizes micro-financing as “other nonbank finan-cial intermediary”, then it will be exempt from vAT, as well.

one of the important drivers of our economy is the SMes which are mostly owned by the poor in society. SMes will only grow if they can have access to financing aid.

Microfinancing entities are cre-ated for this purpose. If microfi-nancing companies will be exempt both from income tax and vAT, then many will invest their money to be lent to the poor.

If the key is for the BSP to recog-nize microfinancing companies as nonbank financial intermediaries like pawnshops, then what is hin-dering it to do so?

The author is a partner of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services Alliance.

The article is for general infor-mation only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at irwin.nidea@bdblaw.com.ph or call 403-2001 local 330.

Putin’s war on far too many fronts

After annexing Crimea and foment-ing unrest in eastern Ukraine, stamping out domestic opposition, deploying his military to Syria, Putin hasn’t responded to the latest outrages.

In Crimea, the lights largely have been out for almost three days, and Gov. Sergei Aksyonov has called on the popu-lation to “prepare for the worst”—that is, a  blackout that could last until the end of december. In Saint Petersburg, the police gave up on stopping the trucks and local officials agreed to meet with the drivers; and Putin’s response to the downing of the Su-24 has been muted and pained rather than aggressive.

on Tuesday the Russian lead-er  called  the incident “a stab in the back” dealt by “those who aid terror-ists.” He accused Turkey of protecting Islamic State (IS) militants because they smuggle oil into the country. He also claimed the plane had been sent to bomb IS positions in northern Lat-akia province, where  IS may have no

presence. When Russia acknowledged that its passenger airliner had been blown up by terrorists over egypt last month, Putin vowed to “find and punish” the perpetrators. He wasn’t as forceful on Tuesday. “Today’s tragic events will have serious consequences for Russian-Turkish relations,” he said. “We will never tolerate crimes like the one com-mitted today.” That hardly sounds like saber-rattling. 

Putin’s allies and mouthpieces have sensed that no forceful response is be-ing considered. “Ankara has clearly not calculated the consequences of its hos-tile actions for Turkey’s interests and its economy,” tweeted Alexei Puishkov, head of the foreign policy committee of parliament’s lower house.  Patriotic commentators weren’t happy with the implication that the response would be purely economic. “What, you’re going to wag a finger at them?” one wrote in response to Pushkov’s tweet. “To hell with the Turkish economy,” another

wrote. “What are we going to do about the Bosphorus?”

A purely economic response could in-clude a ban on air traffic between Russia and Turkey and a freeze on joint busi-ness projects, nikolai Levichev, deputy speaker of parliament’s lower house, suggested. He also called for an evacu-ation of Russian tourists from Turkey —one of the two most popular holiday destinations for Russians, along with egypt, which is now off limits. one of the biggest tour operators, natali Tours, an-nounced on Tuesday that it would sus-pend packages to Turkey.

Any economic sanctions against Turkey probably would hurt Russians as much as the Turks. The economic ties between Russia and Turkey were a poten-tial growth area: Putin and his erstwhile friend, Turkish President Recep Tayyip erdogan, had vowed to raise trade vol-ume from about $25 billion expected this year to $100 billion by 2020. Rus-sia already was Turkey’s biggest import partner last year thanks to big energy purchases, but Russian oil and gas suppli-ers need the market. Turkey’s importance as a trading partner grew last year after Russia introduced a food embargo aimed at countries that have imposed sanctions in response to its aggression in Ukraine. Imports from Turkey dropped 38.5 per-cent year-on-year in January through September, but imports from the euro-pean Union plunged 43.1 percent. If the ties are frozen or severed, neither coun-try will gain. In both, the stock markets dropped after the bomber was shot down. 

Putin is discovering that he may have overstretched. He cannot send troops

into southern Ukraine to restore power to Crimea, because that would cause international outrage and endanger any chance of forging an alliance with Western countries in Syria. nor can he risk a military confrontation with Tur-key, a north Atlantic Treaty organiza-tion member that could cut off Russia’s main supply line to Syria—across the Mediterranean. Russia can’t manage several simultaneous conflicts with its most important neighbors, especially as domestic discontent with austerity measures appears to be rising.

Putin’s Russia is not exactly weak, it’s just alone and unloved after alienating even potential friends such as Turkey and Ukraine. In the near future, if pres-sure rises on any of his multiple fronts, Putin may feel cornered. In a book of in-terviews published in 2000, First Person, he described a formative episode in the dingy Saint Peterburg building where he lived as a boy:

There, on that staircase, I figured out once and for all what the world “cornered” means. There were rats in the hallway. My friends and I would always chase them with sticks. once I saw a huge rat and started pursuing it until I chased it into a corner. It had nowhere to run. So it turned around and threw itself at me. It was unexpected and very scary. now the rat was chasing me.

now, however, it’s Putin who may be cornered. He has pushed around his re-gional partners and rivals, his Western adversaries and a supine population for 15 years. If they all turn on him, he may not have a long-enough stick to fight all of them off. 

TAx lAw for BuSineSSAtty. irwin C. nidea Jr.

BlooMBerg Viewleonid Bershidsky

The Philippine economic Zone Authority (Peza) notched a 13.2-percent growth in investments as of October, propping up the investment promotion

agency’s outlook for a double-digit growth by year-end. According to Director General Lilia B. de Lima, Peza has received investment pledges worth P174. 2 billion from January to October this year, reflecting a growth of 13.18 percent over the 10-month period. This puts Peza on a more positive track to achieve at least a 10-percent growth this year, she said, in an interview with reporters at the Nordic Business Council of the Philippines’s (NBCP) Nordic ambassador’s luncheon event on Wednesday. In terms of employment, the country’s second-largest investment-promotion agency registered 1.2 million new jobs from January to September, a growth of 7.9 percent from the 1.1 million jobs from the same period in 2014. A more dismal outlook, however, is seen for exports as Peza-registered enterprises reported an estimated a slightly lower export receipts of September of just $32.7 billion, a contraction of -0.34 percent. De Lima said she expects a flat growth in exports. Catherine N. Pillas

In its latest Market Call report, First Metro Investment Corp. and University of Asia and the Pacific (FMIC and UA&P) Capital Markets Research said full-year growth may average 6.1 percent. This will be boosted by a projected 6.2-percent growth in the third quarter, and 6.8-percent growth in the fourth quarter of the year. “Despite weak export demand in the third quarter, we remain optimistic that domestic demand will overcome this, not only in the said quarter but in the fourth quarter, as well. However, the relatively tight monetary policy maintained by the Bangko Sentral ng Pilipinas [BSP] provides a possible downside risk to this view,” the think tank said. FMIC and UA&P Capital Markets Re-search said retail firms have indicated that there has been an increase in sales

starting in September this year. It added that, while the country’s manufacturing output posted con-secutive declines between May and July this year, there has already been some recovery. Phi l ippine Stat ist ics Author it y (PSA) data showed that manufactur-ing output grew 1.9 percent in August and 3.5 percent in September. The group also said that the recovery of the US economy bodes well for the country’s electronics exports, particu-larly in the fourth quarter. “The recovery is under way, consider-ing that in September, election spending had barely started. Retail firms have in-dicated to us strong sales in September and October,” the think tank added. “The external sector will not pull down the economy, but rather provide

a minor upward bump,” it added. Further, FMIC and UA&P Capital Markets Research said spending in the fourth quarter will increase due to higher overseas Filipino workers (OFWs) remittances. This, despite the slowdown in OFW deployment in the July-to-August peri-od, affected the amount of remittances sent to the Philippines. The strengthening of the US dollar caused the dollar value of OFW remit-tances to decline, but the 5.4-percent depreciation of the peso enabled the peso value of remittances to increase 4.8 per-cent to P94.3 billion. “We believe this inflow will increase in the last quarter of the year, amid the seasonal bulge of remittances from the OFWs to their families,” the group said. The think tank also believes govern-ment spending will continue to increase starting the third quarter. FMIC and UA&P Capital Markets Research estimates infrastructure and capital outlays posted a 56-percent growth in the third quarter. While government spending is ex-pected to slow down in the fourth quarter, government spending will still exceed 30 percent in the October-to-December period. The group said the September year to

date deficit of the national government reached P26.6 billion, leaving it a deficit space of more than P250 billion for the last quarter of the year. Low government spending has been the perennial cause of slow economic growth under the Aquino administra-tion. Slow government spending caused first-semester growth to reach only 5.4 percent this year. The PSA reported on Wednedsay that the 2015 second-quarter GDP growth was revised upward from 5.6 percent to 5.8 percent. The top 3 contributors to the upward revision were other services; trade and repair of motor vehicles, motorcycles, personal and household goods; and construction. Further, net primary income from the rest of the world for the second quarter was revised upward from 2.2 percent to 3.6 percent. This contributed 0.22 percentage point to the upward revision of gross na-tional income from 5 percent to 5.4 percent. “The PSA revises the GDP estimates based on a revision policy approved by the former NSCB [National Statistical Coordination Board] Executive Board, which is consistent with international standard practices on national accounts revisions,” the PSA said.

Holiday spending likely to boost PHL full-year growth to 6.1%–think tank

Filipino’s holiday spending will likely boost the economy’s growth to above 6 percent in the second half and the

whole year, according to a local think tank.

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phThursday, November 26, 2015

By Cai U. Ordinario

By Jovee Marie N. dela Cruz

DESPITE strong Palace opposition, members of the House of Representatives minority bloc on Wednesday challenged the leadership of the

lower chamber to pass the tax-reform measure, say-ing Congress can override President Aquino’s decision against the proposal if it musters the necessary two-thirds vote of each house. At a news conference, Party-list Rep. Silvestre Bello III of 1-BAP said the lower chamber’s leadership should fight for the passage of income tax-reform bill for the benefit of the Filipino workers. According to Bello President Aquino will be an-swerable to the Filipino people should be continue his unpopular stance on the proposal. “Congress should show its sincerity by passing this bill on the lowering of income-tax rates. Even assuming that the President has already manifested his opposi-tion to this proposal. Let the President vetoes it and we can get back by overriding him if we are sincere here in Congress,” Bello said. “We have to show our teeth. We are becoming the rubber stamp of the Office of the President. Nagiging [Palace] extension office na tayo. We have to show him that we are the voice of the people. And voice of the people is very clear, ayaw nila ng mataas na buwis. So I think Congress should show its sincerity and it convic-tion and come up with that bill,” he added. On Tuesday Speaker Feliciano Belmonte Jr. admitted that the measure seeking to adjust the levels of taxable income to inflation is now considered dead in the House of Representatives due to lack of time. But Party-list Rep. Neri J. Colmenares of Bayan Muna, also author of the tax reform, said that there is still suf-ficient time for the passage of the lower income-tax bill. “We have sessions until December 15. I think that the TWG [technical working group] report was already scheduled to be reported out of the Ways and Means Committee so if the House leadership wants to pass it, then it can easily be tackled and passed by the plenary in December,” he said. “We, as representatives of the people, should not be hindered by the view of Presi-dent Aquino and instead listen to the demands of our constituents. The executive is a co-equal branch of Congress. It has no power to order us what to pass and not to pass,” Colmenares added. House Independent Bloc Leader and Lakas Rep. Mar-tin Romualdez of Leyte, for his part, said that Congress should heed the strong people’s clamor to pass the tax- reform proposal. “This move would show that Congress is a co-equal branch and not Malacañang’s rubber stamp,” Romual-dez said. Meanwhile, Majority Leader and Liberal Party Rep. Neptali M. Gonzales II of Mandaluyong City said the measure should be passed first at the committee level.

minority bloc dares congress leaders to defy aquino’s stand on tax reform

By Butch Fernadez

SENATE President Pro Tempore Ralph G. Recto on Wednesday warned that over 2 million profes-sional drivers set to renew or apply for licenses

are likely to lose P3 billion in “fees and lost income” if the temporarily suspended requirement to secure clearances from the National Bureau of Investigation (NBI) and the Philippine National Police (PNP) is not scrapped altogether. Recto pressed his appeal for “scrapping, and not just mere suspension” of the Land Transportation Office (LTO) order requiring professional drivers to first obtain the NBI and PNP clearances as a requi-site for the issuance of driving licenses. Conceding the points raised by Recto and Senate President Franklin M. Drilon at Tuesday’s plenary deliberations on the proposed 2016 budget of the Department of Transportation and Communica-tions (DOTC), the LTO agreed to suspend and review the requirement. Recto said this should give the DOTC-LTO, NBI and PNP enough time to “establish interconnectivity between their databases so that drivers won’t have to spend time and money lining up for those clearances.” The senator suggested that the NBI and the PNP can just draw up “a negative list” of wanted criminals and furnish this to the LTO. Noting that a solution can be achieved through file sharing, Recto wondered: “Why should public infor-mation be the subject of commerce?” “Kung may red flag ang pangalan mo, then that’s the time that you get a clearance. This way, only those tagged will have to present evidence to the contrary. Hindi ’yung dalawang milyong tao ang peperwisyuhin mo sa pagkahaba-habang pila para kumuha ng mga clear-ances,” the senator said. Citing statistics, Recto estimated that the number of professional drivers who will apply for new or have their licenses renewed next year could reach 2,180,576. He added that the cost of an NBI clearance is P115, and a local police clearance, P170. But before the police issues a clearance, it requires the applicant to present a barangay clearance, which costs P50. However, a barangay clearance will only be issued if the applicant has a Community Tax Certificate, the average cost of each is P20, Recto said. At the same time, he also noted that the PNP also requires two ID photos of the applicant, which adds P60 to the cost. “If you add all of this, it will come up to P415. You multiply this with the number of professional driv-ers, you get almost P1 billion—just on fees alone,” Recto said. The Senator pointed out that applying for clear-ances from three offices—Barangay Council, NBI and PNP—will consume, at the fastest, two days. “Because one will absent from work to do this, then that’s two days’ worth of salary gone. That’s at least P1,000 down the drain per applicant, or P2 billion in lost income for the affected drivers,” Recto said. He supported Drilon’s suggestion for the DOTC to clarify what derogatory information on the re-quired clearances will lead to the rejection of the application and if such will impinge on the privi-lege of an individual to operate a motor vehicle. “Tama si Sen. Frank ng sinabi nya kung may kaso ka ng libel at hindi ka pa convicted, bakit ka pagkakai-tan ng pribilehiyong magmaneho,” Recto said, add-ing: “If you’re an activist and you have a pending case for illegal assembly, I think this shouldn’t be made a basis for the rejection of your application to drive.”

Recto warns 2M drivers to shell out P3B from new LTO requirement

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