Internal Revenue Commissioner Kim Jacinto-Henares made this pro-nouncement in Revenue Memoran-dum Circular (RMC) 45-2015, which clarified the sharing of the tax bur-den between the Philippines and the Japanese contractors of the projects

funded under Japan’s Overseas Eco-nomic Cooperation Fund (OECF). The OECF is a regular source of foreign funds for the Philippines, and from which, according to the latest figures from the Bureau of

IF the 1997 Asian financial crisis was a heart attack for emerging markets, the current situation

is akin to chronic cardiovascular disease, according to Macquarie analysts, led by Viktor Shvets and Chetan Seth. In 1997 speculative attacks against the Thai baht forced the country to float and devalue its cur-rency in a move that was swiftly fol-lowed by the Philippines, Malaysia, Singapore and Indonesia. Then came a massive decline in Hong Kong’s stock market that led to losses in

markets around the globe. While parallels exist between 1997 and the current emerging- market sell-off—notably in the form of a  stronger dollar, which makes it more expensive for emerging-market  countries to finance their debts, plus lower commodity prices and slowing trade—the Macquarie analysts reckon the current situation might actually be worse.

EM, DM economiesInSTEAd of sharp heart attack (à la 1997), it is far more likely that

emerging market (EM) economies and markets would face an extend-ed period that can be best described as a “chronic disease,” with limited (if any) cures or exits, punctuated by occasional significant flare-ups (short of an outright heart attack). In many ways, it is likely to be a far more painful and insidious process. In the meantime, any sign of significant strain (either at a country or corporate level) could easily freeze up the emerging- market universe. 

www.businessmirror.com.ph n Thursday 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 7 sections 32 pages | 7 days a weekn Friday, september 18, 2015 Vol. 10 No. 344

A broader look at today’s businessBusinessMirrorthrEE-tiME

rotary club of Manila journalisM awarDEE2006, 2010, 2012u.n. MEDia awarD 2008

See “1997-type crisis,” A2

PEso ExchangE ratEs n us 46.7000 n jaPan 0.3875 n uK 72.3430 n hK 6.0256 n china 7.3302 n singaPorE 33.4288 n australia 33.5633 n Eu 52.6963 n sauDi arabia 12.4560 Source: BSP (17 September 2015)

Japanese ODAs face delays anewb.i.r. scraPs Manila-toKyo DEal on oEcf-funDED ProjEcts by iMPosing 5% Vat on jaPanEsE contractors

INSIDE

GAB FAB:AS GLORIA

GAYNOR ONCE SANG, EJAY WILL

SURVIVE »D4

D1

Life Friday, September 18, 2015BusinessMirrorEditor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

DEAR Lord, help us, parents, prioritize the most important things for our children. To know You, to serve You and to love You. And the simplest and

most direct to reach You is a habit of prayer to be instilled in their minds as they grow in all levels. As parents, we try our best to love our children with utmost care. We guide them at early age. We bring them to Church and serve the community. We ask the Holy Spirit to inspire them in everything they do, think and say. We encourage them to persevere in whatever task they do for the love of You. Amen.

A habit of prayer

LIVING WATER, JC RYLE AND LOUIE M. LACSONWord&Life Publications • teacherlouie1965@yahoo.com

JOSH GROBAN IN ‘STAGES’

B S MPittsburgh Post-Gazette

LOOK on any Internet blog or fan site for Josh Groban and the feeling among fans is pretty unanimous—Stages is the musical release they have

been waiting for.It was also the album the artist

dreamed of ever since he was signed to a major label at the age of 17 by David Foster. “It’s been in the back of my head since I was a kid.”

Groban left Carnegie Mellon University (CMU) as a freshman to work with Foster. One fateful day, Foster called

on him to stand in for Andrea Bocelli at rehearsals for the 1999 Grammy Awards to sing “The Prayer” with Celine Dion, launching him into the limelight. By the time he released the platinum-selling Josh Groban, he was already a star, and his version of “The Prayer” (recorded with Charlotte Church) rocketed him to super-stardom. Fans would have to wait almost a decade to get a taste of his musical-theater chops as he costarred in PBS’s Great Performances: Chess in Concert with Idina Menzel (Wicked) and Adam Pascal (Rent) back in 2008—and brought down the house with his performance of “Anthem” in the role of The Russian, Anatoly Sergievsky.

That song closes his collection of 13 iconic songs that for the most part have transcended the genre and stand on their own as classics. One beloved tune didn’t make the cut: “Being Alive” from Company.

“The arrangement wasn’t working, I recorded it and tried, it just wasn’t happening,” he says. He has plans to release it on something else in the future, as it is one of his favorites.

Musical preparation for this project pushed the singer to very different places than all of his other projects.

“I would say this is the most

C D

MotoringE1 Friday, September 18, 2015

Henry Ford AwardsBest Motoring Section2007, 2008, 2009, 20102011 Hall of Fame

Editor: Tet Andolong

BusinessMirror

Since the time Sean Connery first appeared behind the wheel of a Silver Birch DB5 in the 1964 film  Goldfinger, Filipino fans of not just the fabled English spy, but also this legendary luxury sports car from Britain, are very much agog about its advent here in our country.

This is why praising DBPhils Motorsports President and Chair-man Marc Tagle and Director Marc Soong is most fitting for bringing to the Philippines the marque’s first-ever dealership, on the ground floor of the W Fifth Avenue Building in the Bonifacio Global City in Taguig.

Yes, Aston Martin has finally ar-rived in the country and its found-ers, Robert Bamford and Lionel Martin, couldn’t be more proud.

In his speech, Aston Martin Asia

Pacific Regional Director Patrik Nilsson said: “The economic growth in Asia Pacific represents a huge potential for the brand. I am very pleased that we have found the per-fect partners in Manila, who share our passion for Aston Martin. This expansion will surely strengthen our network.”  

Tagle said during an interview, “The Aston Martin is one that is powerful, exhilarating and pre-cise yet, timelessly elegant and sophisticated. It has exception-al engineering and unrivalled craftsmanship. Each car is the es-sence of power, beauty and soul, that’s why we decided to bring it over here in the Philippines.”

During his speech, Tagle an-nounced the introduction of the full range of Aston Martin sports cars. From the track-inspired Vantage, the

timeless DB9 and elegant four-door Rapide S to the ultimate in sporting luxury: the Vanquish.

He also confirmed that orders have been taken on models even before the official opening of the dealership, which includes the 100-unit limited production Vantage GT12. “Worldwide, there are only about 4,000 to 5,000 Aston Martin units,’’ Tagle said.

Aston Martin Manila will also

offer door-to-door pickup and de-livery services for maintenance and repairs of customers’ vehicles. Owners can rest assured that their cars will only be maintained by As-ton Martin-certified technicians using the brand’s latest diagnostic equipment and tools.

Tagle said that they will wel-come all Aston Martin owners at their new state-of-the-art after-sales facility, including those who

imported their cars before their official presence.

“This will be a new start for ex-isting Aston Martin customers,” he said.

The DBMotorsports Inc. head honcho sees the luxury car segment steadily growing in the Philippines and is elated that Aston Martin en-thusiasts will now be able to enjoy ownership of these exclusive luxu-ry sports cars.

Currently displayed at its state-of-the-art showroom is the Aston Martin Vanquish. Among its fine stable of luxury sports car, it im-mediately catches your attention and perfectly exudes a bold blue-print for the next generation of this sports car icon. It is said to be a car without compromise, unmatched athleticism and agility. The latest evolutionary step raises the bar once again. The signature 6-liter V12 endows the Vanquish with su-percar performance, which is capa-ble of 323 kilometers per hour and

zero to 97 kph in 3.6 seconds.The Coupe version, which is

currently available for every-one’s eyes to feast upon, sports an Adaptive Damping System with three modes—Normal, Sport and Track—matched with the Touchtronic III gearbox that offers a broad range of operation, from seamless automatic mode to 130-ms paddle operated shifts.

Aston Martin was founded in 1913 and is now entering its second century in business. The renowned British company’s headquarters is in Gaydon, War-wickshire, which was built on the passion, skill and creativity of the people, who have dedicated their working lives to one of the most renowned brands in the world.

Currently, its CEO Andy Palmer is looking forward to an exciting fu-ture as clear as “diamonds are for-ever”. And with this, for any Aston Martin aficionado, the world truly, thus far, is not enough.

Story & photos by Ronald Rey M. de los Reyes

UTTERING the phrase “Bond. James Bond” could become a lot easier these days for suave,

local 007 Agent enthusiasts, especially if they have the dough.

DBPHils Motorsports inc. President and Chairman Marc Tagle (left) together with Aston Martin Asia Pacific Regional Director Patrik Nilsson stand beside the Aston Martin Vanquish.

THe Aston Martin Vanquish sports a V12 engine with a 6-liter capacity

josh groban in ‘stages’

‘bond. james bond.’

liFe d1

moToring e1

Villar bags 2015cEo ExcEl awarD

1997-type crisis: Already averted or something worse in the offing

women and economy President aquino delivers his speech during the asia-Pacific economic cooperation women and the economy 2015 Fora on Public-Private dialogue on women and the economy at the reception Hall of the Philippine international convention center in Pasay city on Thursday, with the theme “women as Prime movers of inclusive growth.” MalacañaNg Photo

MAnuEl PAOlO A. VIl-lAR, president and CEO of Vista land &

lifescapes Inc., recently received the 2015 CEO Excel (Communi-cation Excellence in Organiza-tions) Award from the Interna-tional Association of Business Communicators (IABC) Philip-pines. during the awarding cere-monies at the Grand Ballroom of Hotel InterContinental in Makati City, the IABC cited Vil-lar’s innovative use of strategic communication in his organi-zation’s programs, such as the Vista Center for Professional development and 02-Camella telephony services. Villar joins the elite roster of winners in the IABC Philippines’s

honor program for top-level ex-ecutives and organization leaders. The IABC Philippines is the first chapter outside north America of the global Interna-tional Association of Business Communicators, a global net-work of the best marketing, pub-lic relations and corporate com-munication practitioners across different industries, and in both private and public sectors. The organization embodies the importance of international linkages and the sharing of best communication practices, ideas and experience among busi-ness professionals around the world. Its banner programs are the CEO Excel Awards, and the Philippine Quill and Student Quill awards.

By David Cagahastian

The implementation of projects funded by Japan’s official development assistance (ODA)

is again at risk of being delayed, after the Bureau of Internal Revenue declared that Japanese contractors cannot pass on the full 12-percent value-added tax (VAT) to the Philippine government.

Continued on A5

For its part, pioneering flag carrier Philip-pine Airlines (PAL) supports the Aquino admin-istration’s protection of Naia in Manila, the main gateway of tourists to the Philippines, due to its congested runways and terminals. But it added that it supports ASAM, as it opens up secondary airports as other tourism gateways to the Philippines. In an e-mail, airline President and COO Jaime J. Bautista said: “PAL has supported Asean open skies as a way of stimulating the opening of direct airline routes to the Philippines’s tourist gateways. With PAL’s support, the Philippines ratified Asean open skies several years ago for services to all Philippine airports, except Naia;

and, thus, any Asean airline can operate nonstop from any airport in the Asean region to Cebu, Clark, Davao, Laoag, Laguindingan, Bohol, Iloilo, Puerto Princesa and any other secondary airports in the country.” He added: “The remaining obstacle is Manila, because the runways, terminals and facilities at Naia are currently overstressed in handling exist-ing flights, much less any significant expansion of flights under any kind of open-skies arrange-ment. The government has rightfully held back from including Naia in the ratified Asean open- skies agreements, and, indeed, there is much work to be done to expand Naia or develop a new Manila airport before the Philippines could consider meaningful open skies. In the mean-time, Asean airlines can serve the capital by fly-

ing to Clark.” Aileen Clemente, president of the Asean Tourism Association (Aseanta), earlier said the issue of having no more slots in Manila for foreign carriers and the principle of open skies should be separate from each other. She pointed out that “Indonesia already signed [the protocols], even if the Jakarta airport currently doesn’t have slots to provide [foreign carriers],” making the Philippines the last holdout to the region-wide agreement. Aseanta is composed of public and private tourism-sector organizations from the Asean, which help implement the Asean strategic tour-ism plan—a road map to ensure that the region remains a successful tourism destination. Zapanta, for his part, believes the rest of Asean will not press the Philippines to fully

open its main gateway to foreign carriers, even if it will be the remaining country, which will continue to do so. “The other members of Asean will respect the limitation we imposed in the non-ratification of Protocols 5 and 6. They have the option to reciprocate the restriction, i.e., not giving the Philippines unlimited third, fourth and fifth [flying rights] in their capital cities, and keep within bilaterally agreed level of such traffic rights.” Third and fourth freedom rights allow carriers to fly from their home country to another foreign country, sans government approval. Fifth freedom rights allows any carrier to fly between two foreign countries during flights origi-nating or ending in said airline’s home country. Meanwhile, PAL said it was willing to compete

under the ASAM but urged other Asean member- nations to privatize their flag carriers to make competition more equitable in the region. “PAL is always able and willing to compete with airlines in Asean and all over the world,” said Bau-tista. “In Asean we’ve advocated a policy for each member-state to take the bold leap to privatize their flag carriers, so that their airlines can prog-ress from state ownership and dependence to become normal business enterprises. That would make it more fair or equitable, as the Philippines is the only Asean member-state to have made those bold moves more than two decades ago.” The 10 members of the Asean are Brunei Darus-salam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

BusinessMirror news@businessmirror.com.ph Friday, September 18, 2015 A2

News

1997-type crisis: Already averted or something worse in the offing. . . Continued from A1

Continued from A8

The crux of their argument is that, despite the difficulties of 1997, its effects were mitigated by rising global leverage, liquidity and trade shortly thereafter. This time around, those factors might not be there. (A) combination of excessively loose mon-etary policies (particularly post-2000 bursting of dot-com bubble) and China’s integration into global trade systems has enabled both EMs and developed markets (DMs) to recover quickly. This does not describe the environ-ment facing EMs and DMs over the next five to 10 years. The combination of long-term structural shifts (primarily driven by the grinding de-flationary progress of the Third Industrial Revolution, which first became apparent in early 1990s but matured into a global phe-nomenon over the last decade) is aggravated by the more recent impact of overleveraging and associated overcapacity. Such countries as Turkey, South Africa and

Malaysia appear the most at risk on this basis, while China, the Philippines and South Korea seem better positioned. Although Brazil and Russia score well on the chart, Macquarie argues that their low expo-sure to external debt could still be undermined by slumping commodities and slowing trade.

Differing opinionINDONESIA’S rupiah and Malaysia’s ringgit have fallen to levels hit during the Asian financial crisis of 1997 and 1998, leading a decline in the region’s currencies. But the drop won’t spark the same economic meltdown this time around, according to analysts who watched the disaster unfold almost two de-cades ago. In fact, it could be a healthy realignment that helps boost exports. The slide in currencies, exacerbated by China’s surprise devaluation of the yuan by the most in two decades last month and a strengthening US dollar, is occurring amid lower external debt burdens, more flexible exchange rates and higher foreign-currency

reserves than before. Most Southeast Asian econo-mies now run current-account surpluses, instead of the deficits they had before the late 1990s crisis. “Things are fundamentally different now com-pared with 1997,” said Tomo Kinoshita, chief econo-mist at Nomura Securities Co., who studied Asian economies over the past 18 years. “Authorities have introduced quite rigid prudential measures to avoid a currency crisis. The depreciation in the currency is a positive factor for the exports and general com-petitiveness of those Asian nations.” Better shapeMALAySIA and South Korea have run current-account surpluses every year since 1998. And the region has accumulated foreign-exchange reserves. Indonesia’s stockpile is five times as large as it was 18 years ago, and Thailand’s six times. The four countries’ external debt—excluding reserves—has fallen from 60 percent of gross domestic product (GDP) in 1997 to 11 percent of GDP, according to DBS Group Holdings Ltd.

“The region still has many buffers, so we are not in a repeat of the Asian crisis context,” said Anoop Singh, former director of the Asia and Pacific De-partment at the International Monetary Fund (IMF), who led missions to Thailand, Indonesia and Malaysia during the Asian crisis. “The US is clearly recovering strongly, and this is good news for the region and the global economy.” Buffers for the region include banking regula-tions that were tightened in the wake of the Asian financial crisis itself, and the 2007 to 2009 global credit crisis.

Crisis helped“IN hindsight, without the Asian financial crisis, even just the banking system wouldn’t be as strong as now,” Fauzi Ichsan, head of Indonesia’s bank-deposit insurance agency, said in an interview this week. Indonesia’s bailout package -- signed with the IMF chief standing over the country’s president in an infamous photograph—proved useful in pushing reforms, according to Ichsan.

Exports boostTHAT’S starting to show: Indonesia’s shipments to the US, the country’s largest destination, rose 14 percent in August from July. A US recovery also has Southeast Asian pol-icy-makers bracing for an increase in interest rates by the Federal Reserve, which meets on September 16 and 17, a move that may draw capital out of the region. However, outflows from Asia shouldn’t be significant, David Carbon, chief economist at DBS in Singapore, wrote in a Sep-tember 10 note. “The amount of capital that does or doesn’t flow out of Asia in the weeks ahead will depend on three things: the strength of the US, the weak-ness of China and how much Asia today resembles the Asia of 1997,” said Carbon, who began cover-ing Asian markets and economies in 1994, when the Fed began a monetary-tightening cycle. “Fear not. The US is not as strong as many believe. China is not as weak. And Asia today looks nothing like 1997.” Bloomberg News

Asean open skies will go on sans Manila OK

“We need to verify [that],” Com-munications Secretary Herminio B. Coloma Jr. said on Thursday.

Coloma’s response referred to a report the Commission on Elections (Comelec) used as basis to compel the supplier of Optical Mark Reader (OMR) machines to transfer its man-ufacturing site for OMR machines from mainland China to Taiwan.

On Wednesday Commission-er Christian Robert Lim told congressmen that the Comelec ordered Smartmatic-Total In-formation Management (TIM) Corp. to transfer sites because of intelligence reports that China would sabotage next year’s presi-dential elections.

Lim pointed to the military as

the source of the intelligence report.“This is the first time that the

Armed Forces of the Philippines [AFP] received information on the matter and after checking with our concerned staff offices, we found out there is no report in our files to substantiate this. Hence, we could not comment on an issue we know nothing about,” AFP Spokesman Col. Restituto Padilla said.

Another official, who request-ed not to be named citing chain of command protocol, denied the military ever has a report on China’s plans.

“We are not the source of the report,” the official knowledgeable on regional security said.

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

However, the Palace remained mum on whether President Aquino had been briefed about the so-called intelligence report.

Asked if it was inclined to order a deeper probe on the matter, Coloma pointed to poll officials.

“It is best that the Comelec explain this matter, as we have no information on the point ment ioned by L i m du r i ng a House of Representatives hear-ing on Wednesday.”

Meanwhile, Venezuelan firm Smartmatic-TIM said it agreed to the Comelec’s request.

Smartmatic President for Asia Pacific Cesar Flores said in a state-ment that they would transfer the manufacturing site to Taiwan, de-spite an estimated P400 million cost to his company.

“We have agreed to the said re-quest, despite the fact that such a transfer will force us to shoulder an additional cost amounting to 5 percent of the total contract price,” Flores said.

The Comelec earlier award-ed the contracts for the lease of 70,977 and 23,000 OMR ma-chines, after Smartmatic-TIM sub-mitted winning bids of P6.3 billion

and P1.7 billion, respectively. But Flores clarified its deci-

sion does not mean the company shares the apprehension of the Comelec officials.

It noted that China and Taiwan “operate under the strictest inter-national standards, and are both capable of manufacturing the ma-chines to specifications.”

The delivery of the OMR ma-chines to be used in the May 2016 polls is expected to be completed by the end of January.

Speaking on request of anonym-ity, a military official said the elec-tion results could be sabotaged by anybody by sending a computer malware into the system.

It can be presumed that the threat exists, according to the official, add-ing that malicious software “can be activated anytime.”

The poll machines are technically computers, the official said.

“You don’t need to be a rocket scientist” to determine the ma-chines’ vulnerability, the offi-cial added.

Still, the AFP statement issued on Thursday cautioned the Come-lec from raising the “China bogey” in next year’s elections.

State moves to verify intel reportson ‘China threat’ to sabotage polls

Military officials caution coMelec in raising ‘china bogey’

By Rene Acosta, Butch Fernandez & Joel R. San Juan

WHILE Malacañang said it is still verifying supposed intelligence report accusing

China of threatening next year’s elections, military officials deny they were the source of the data.

THE military is building up its capability in dealing with nonconventional threats by

training some of its men in address-ing attacks using chemical, biologi-cal, radiological, nuclear and explo-sive (CBRNE) weapons, so-called weapons of mass destruction.

While the Armed Forces of the Philippines (AFP) do not have in its stocks these types of weapons, it was nevertheless training some of its troops in handling them and ensure they are prepared to deal with them if these weapons are used.

The ongoing specialized train-ing for soldiers was disclosed on Thursday by AFP Deputy Chief of Staff Lt. Gen. Edgar Fallorina after he led other officials in accepting P1 million worth of CBRNE equip-ment from the US government.

This is the first time we have had these equipment, Fallorina told reporters. “But this capability development has been going on for quite some time.”

Fallorina explained the AFP “started out with a small number [of trainees].” “Now we have a pla-toon size with the corresponding equipment,” he added thanking the Americans for the anti-CBRNE gear.

The military viewed the training in handling CBRNE as complement-ing the ongoing AFP modernization program and defending the West Philippine Sea. The latter is being

claimed by the country’s neighbors.One of the claimants, China, is a

nuclear weapons-ready state, Fallo-rina said. He said training and equip-ping troops should be replicated in other units of the military until it has a sizeable number that can deal with these kinds of threat.

“This will be replicated in oth-er major services until such time that we have a substantial number of personnel really qualified for CBRNE activities.”

He, however, could not say if the military would ever deal with threats posed by nonconventional weapons, expect for disasters.

“We really can’t tell about the future. But if we look back in his-tory, we have a lot of major disas-ters. Suffice to say it’s always better to be prepared rather than be sorry when the time comes,” he said.

“With the competing priorities in terms of capability development of the Armed Forces, we really, shall we say, late in developing this capa-bility. But thanks to our counter-parts, we are given some support and we’re able to start the capabil-ity development for this specific, basically a capability gap because we don’t have that yet,” he added.

Fallorina said soldiers, or those trained in dealing with CBRNE, would be the first responders should threats arise from these types of weapons. Rene Acosta

Troops trained on neutralizingweapons of mass destruction

BusinessMirror news@businessmirror.com.ph A4

Economy

In a study titled “An Assessment of the Community Mortgage Pro-grams of the Social Housing Finance Corp. (SHFC),” authors, led by PIDS research fellow Marife Ballesteros, said reforming the CMP is necessary to improve the program. “The potential leakage from

the above CMP processes requires SHFC to be proactive in targeting communities and households, and to implement a subsidy mechanism that will protect the poor and near-poor from being dislodged from the program,” the authors stated. T he CMP, the authors ex-

FIlIPIno boxing icon Manny Pacquiao and tourism of-ficials said on Wednesday

that images of the Philippine capi-tal and the country’s main tour-ist spots on Google’s Street View could help attract more visitors to the country.

Google Country Marketing Manager Ryan Morales said the Philippines became the 69th coun-try included in Google’s Street View with its Wednesday launch-ing in Manila.

The images captured over six months last year include pano-ramic views of street scenes in 37 cities and 35 historic and heritage sites, including Pacquiao’s south-ern hometown, where he began his career as one of the world’s most popular boxers.

Rocked by insurgencies and poor infrastructure, the Phil-ippines st r ug gles to bolster tourism, lagging neighboring Malaysia, Thailand, Singapore and Vietnam.

Pacquiao said the images include his old neighborhood in Sarangani province, which he represents as a congressman; General Santos City, the country’s tuna capital; and the City Hall, where he used to sell bread

to earn money when he was a young boy from a dirt-poor family.

He said the Google project will support “our goal of making the Philippines a top tourist destina-tion in Asia.”

In jest, he said that he may “need a rematch with [Floyd] Mayweath-er” to raise money to bring more visitors to Sarangani, but that the images will do that for him. Pac-quiao lost to Mayweather in May in boxing’s richest fight.

“I do not need to give away plane tickets and spend a lot of money to showcase the beauty of our province,” he said with a broad smile. Pacquiao is known to spend large amounts to bring along a huge entourage to watch his fights.

Domingo Ramon Enerio III, the Coo of the Tourism Promo-tions Board, said tourism is a “feel-good industry” which con-tributed $6 billion to the Philip-pine economy last year.

T he government stat ist ics agency has reported that tour-ism contributed 7.8 percent to the economy last year.

Enerio said the government is confident the Philippines will sur-pass 5 million visitors for the first time this year. AP

Friday, September 18, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

Philippine tourism seen to benefit from Street View inclusion

plained, is a financing scheme that enables organized residents of slums to borrow for land pur-chase and housing development. The authors said the CMP, as a program, allows nonresidents of communities it serves to avail themselves of the loans. Under the CMP, for on-site projects, around 15 percent of communit y assoc iat ion (C A) members can be nonresidents of the community. For off-site projects, the CMP al-lows that 70 percent of CA members can be composed of households that lived elsewhere. “Since the decision to include/exclude households is made pri-marily by CA officers, there is a high probability of inclusion of households, specifically in off-site projects that are not the target ben-

eficiaries of CMP,” the study stated. The study added that the SHFC also gives CAs the responsibility to substitute beneficiaries based on nonpayment of amortizations. The PIDS researchers said that, while substitution helps prevent foreclosure through litigation process, it may cause poor house-holds, who need the CMP, to be booted out of the program. “The poor may actually be the ones defaulting in payments and getting substituted in the program. Moreover, substitution requires the ‘new’ member to update the loan and pay the arrearages; it is unlikely that poor household can provide these funds,” the authors said. Further, the PIDS study said the prohibitive cost of land in urban areas has increased and is now higher than the maximum loana-

ble amount per household. This now requires borrowers to extend equity from their own pockets just to purchase the prop-erty. The study warned that poor households may not be able to raise the required equity. There are also problems with loan repayments, since only about 25 percent of the member-bene-ficiary accounts are current. The study added that over 50 percent of the aging individual ac-counts are past due and the rest, or remaining 25 percent, are either under litigation, remedial action or restructured. “Considering that CMP is the main loan product of the SHFC and that the agency’s operations are sus-tained primarily by interest income from loans, the sustainability of the program is at risk,” the study stated.

The CMP was created to address the pervasiveness of slum dwelling in the Philippines. Based on the Fam-ily Income and Expenditure Survey, the government estimated that the number of informal-settler families in the country grew 7.2 percent an-nually between 1991 and 2012. The growth rate was highest in the national Capital Region, or Metro Manila, Zamboanga Pe-ninsula, Calabarzon and Central Visayas, which are also the highly urbanized areas or regions exhibit-ing fast pace of urbanization. The Cordillera Administrative Region (CAR) exhibited growth of 40 percent annually in the same period. While the propor-tion of informal-settler families in the CAR represents only 0.1 percent of the total, this growth is alarming, the study noted.

PIDS: Govt needs to tweak mortgage program for poorBy Cai U. Ordinario

Poor targeting and other implementation problems could lead to leakages in the

government’s Community Mortgage Program (CMP), according to a study released by the Philippine Institute for Development Studies (PIDS).

MANNY PACQUIAO joins the launch of the Google Street View by showing his province, Sarangani, to the media. The Philippines is the 69th country to have the Google product, which was launched on Wednesday in Pasay City. Street View is a feature of Google Maps, where a 360-degree view of a certain place can be viewed. This is expected to boost the Philippines, most especially in the tourism sector. Stephanie tumampoS

By Catherine N. Pillas

THE Department of Trade and Industry (DTI) has also aban-doned the government goal

of growing merchandise exports by twin digits this year, as demand from China and other top export markets continues to diminish. “We just have to live with it for the time being because our main market is really China. The US is good, but China’s really bad,” Export Marketing Bureau Di-rector Senen M. Perlada told reporters on the sidelines of Procter & Gamble’s SME leadership College workshop. The DTI now sees merchandise exports growth at 3 percent to 5 per-cent this year. The national Economic and Develop-ment Authority had also declared that the government target of 10-percent growth in export receipts this year will no longer be achieved. China’s has a 16.3-percent share in the Philippines’s exports, according to the lat-est data from the Philippine Statistics Au-thority. Japan is the country’s top export market with a 19.3-percent share. Merchandise exports in July amount-ed to $5.327 billion, a 1.8-percent drop from the same month in 2014. Exports have dropped by 4.1 percent in the first seven months of the year, or from $35.6 billion in 2014 to $34.214 billion this year. on top of this, even if electron-ics exports—the country’s major manufactured export segment—have grown by 34.6 percent in July, this is being offset by the slowdown in ag-ricultural products. “Banana, pineapple, mango and other

processed foods that use these as raw ma-terials are down because of the drought; and it can get even worse,” Perlada noted. Agro-based products take up 6 per-cent of the country’s export receipts in July, amounting to $322.23 million. This figure is a drop of 24.5 percent from the $ 426.66 million in July 2014. The rise in exports to the US and the European Union has not been enough to offset China’s diminishing demand, while the impact of the peso depreciation is negligble, the DTI director said. The surge in services, however, is expected to prop up total exports, Perlada noted. “The BPo [business-process out-sourcing] sector is bound to grow by 15 percent this year. For the non-BPo service sectors, probably single digit,” he added. Even with this tempered forecast, the DTI official declined to declare an official revision of export targets. The Philippines has been experienc-ing a contraction in exports this year, driven mostly by the problematic eco-nomic conditions in China. Meanwhile, the Philippines is set to make a push for the agenda of micro, small and medium enterprises (MSMEs) at the World Trade organization (WTo) through the ministerial meeting in December. outgoing Trade Secretary Gregory l. Domingo said this is the main agenda of the country when it serves as a vice chair-man of the WTo Ministerial Meeting. Domingo said he hopes his cam-paign for MSMEs wil l be the legacy of his term at the DTI, which wil l end on December 31. Domingo will be going to Geneva next week to present the Philippines’s

MSME agenda to a WTo committee, in preparation for the December meeting. “At the end of this month, I will be go-ing to the WTo to make a major presen-tation of the MSME agenda. In the WTo Ministerial Meeting in December, the Philippines has also been made one of the three vice chairmen because of this push,” Domingo said on the sidelines of the Procter & Gamble SME leadership forum held on Thursday. The presentation to the WTo will largely be based on the Boracay Action Agenda (BAA) drafted by the Asia-Pacific Economic Cooperation member-econo-mies’ trade ministers during the Apec Ministerial Trade Meeting in May. The BAA focused on easing trade rules for MSMEs. It includes initia-tives, such as the setting up of green lanes at the Bureau of Customs and easing of de minimis rules on the traded goods of MSMEs. “The BAA is our bible for pushing MSMEs to be able to export in the inter-national trade. We want to try to have a statement [from WTo members] to commit to our agenda at the end of the Kenya meeting,” Domingo said. The trade chief said the agenda for MSMEs has long been an advocacy of the DTI, and this will continue even af-ter his departure. The DTI has implemented facility-lending scheme for SME through the Shared Service Facility (SSF) Program, and aided entrepreneurs in far-flung communities to set up their business through the SME Roving Academy. About 99 percent of enterprises reg-istered in the Philippines are considered MSMEs. The sector is also said to con-tribute one-third of the national output.

Dti cutS exportS growth forecaSt to Single Digit

PrOCTer & Gamble (P&G) Asia Finance and Accounting Vice President Nicholas Defeuw speaks during the P&G SMe Leadership College 2015 workshop, a one-day event that aims to enhance the leadership capabilities of almost 200 participants from different sectors. alYSa Salen

By Catherine N. Pillas

The steep cost of labor in the country discourages the en-try of more foreign investors

in the Philippines, a group of hu-man- resource management (hRM) executives said on Thursday. The People Management As-sociat ion of the Phi l ippines (PMAP) said the cost of labor is a major factor behind the deci-sion of foreign investors to put up their business in any country. “The No. 1 issue is the high cost of labor. Minimum wage in the Philip-pines is P481 today. In Vietnam, it is a dollar. If I produce an item here, I would have to spend P481 as against P47,” Rene Gener, PMAP executive director, said in a news briefing. Data from the National Wag-es and Productivity Commission showed that labor cost in the Phil-ippines is the highest among seven Southeast Asian nations. Month-ly salary in the Philippines is at $294.60; Thailand, $265.68; Malay-sia, $211.50; Vietnam, ranges from $98 to $141.94; Cambodia, $121.90; Indonesia, $82.28; and Laos, $41.68. Gener said red tape, high corpo-rate taxes, high power costs and the lack of infrastructure also deter for-eign investments in the Philippines. PMAP said the lack of infra-

the Treasury, some P1.81 billion had been borrowed by the government from January to July this year. henares said that although the exchange of Notes between the Phil-ippines and Japan regarding OeCF-funded projects provided that the Philippines will shoulder all taxes imposed on Japanese contractors on the payments made by the Philip-pine government to them using the OeCF, these Japanese contractors cannot pass on the 12-percent VAT they incurred from other suppliers and subcontractors. The sharing of the tax burden between the Philippine government and the Japanese contractors is indi-cated in RMC 42-99 issued in 1999. The old circular provided that the Philippines will shoulder the 8.5- percent creditable withholding tax on payments to the Japanese con-tractors, who, in turn, can pass on the VAT they incur from their other suppliers and subcontractors. however, the RMC 45-2015 provided that the sharing of the tax burden is no longer operative with the amendments in the VAT law, which indicated that payments

made by the government shall be subject to a 5-percent final VAT withholding tax. Under the final VAT withholding tax system implemented on pay-ments made by the Philippine gov-ernment, a final VAT of 5 percent is withheld by the government as payor, while the remaining 7-per-cent VAT shall already be consid-ered the input VAT of the payee on the transaction. “The Japanese contractors of OeCF-funded projects cannot in-clude in its billing the whole 12-per-cent VAT that will be assumed by the Philippine government on its instrumentalities or agencies in accordance with the exchange of Notes,” the circular read. Despite this, National economic and Development Authority (Neda) Deputy Director General Rolando G. Tungpalan said the Japanese govern-ment has not given any indication that it intends to put on hold any Japan-funded projects. “In the last state visit [of Presi-dent Aquino], Japan and the Phil-ippines even signed three loan agreements,” Tungpalan said in

a telephone interview. In 2007 the implementation of nine Japan-funded projects was put on hold due to the government’s non-payment of VAT reimbursement to Japanese businessmen. Neda admitted that the nonpay-ment of VAT was the chief reason behind the delay in Japan’s release of funds for ODA projects. At the time, VAT reimburse-ments due to Japanese businessmen amounted to P300 million. The gov-ernment said, however, that it needed to process some documents before it could release the payments. In 2004 the Neda disclosed that it did not process any Japan Inter-national Cooperation Agency grants due to the issue on VAT reimburse-ments to Japanese businessmen. The nonpayment of VAT had caused the Japanese government to threaten to withhold the fu-ture release of funds for several grant-aid projects. Up to now there are several Jap-anese ODA projects that are yet to be competed due to delays in imple-mentation and procurement. With Cai U. Ordinario

As of end-April this year, the agency said that these contracts have a potential generation capac-ity of 13,574.68 megawatts (MW) as against a total installed capacity of 2,912.01 MW. Of the 682 Re projects awarded by the government, 411 are hydro-power; 92 for solar; 50 for wind; 40 for biomass, 43 for geothermal; and eight for ocean energy. These 644 contracts were awarded for grid use. On top of these, there were 38 Re contracts awarded for self-generation of electricity for their own use. These include one each for hydro and wind; 12 for solar; and 24 for biomass.

The latest DOe data also showed that of the pending Re projects, 167 are hydro; 51 for solar; two for ocean; nine for biomass; nine for wind; and two are geothermal. The potential generation capacity of these pending Re projects could reach 3,786.70 MW as against an installed capacity of 196.70 MW. Under the National Renewable energy Plan, the DOe aims to in-crease the countrys Re generation to 15,304 MW by 2030. The DOe has already streamlined the process of Re applications, from two years down to just 45 days, to ensure that Re developers and in-vestors will have an easier time in

Japanese ODAs face delays anew. . . continued from a1

Friday, September 18, 2015 A5BusinessMirrorEconomy

applying for Re service contracts. Moreover, the DOe has part-nered with the Department with the United States Agency for Interna-tional Development to develop the energy Vehicle One Shared System (eVOSS), a Web-based monitoring of Re applications. Originally patterned from the One-Stop Facilitation and Moni-toring Center Web Portal for Mind-anao Re projects, the eVOSS aims to facilitate and streamline the process of Re applications. The eVOSS can track the number of days an application is pending with a certain government agency. It tells the status of an application and states how long before an approval is secured, among others. To promote the use of Re on a larger scale and to attract new investments for Re facilities, the government is banking on the feed-in-tariff (FiT) system. FiT is a premium rate paid for elec-tricity fed into the electricity grid from a designated renewable electricity generation source, like solar-energy system or wind-power plant.

DOE awarded 682 RE contracts as of end-April

By Lenie Lectura

THE Department of Energy (DOE) has awarded 682 renewable-energy (RE) contracts,

seven years after the Renewable Act of 2008 was enacted into law.

‘High labor cost deters foreign investments’

STORE ON WHEELS A street vendor peddles traditional Filipino household items on a push cart along Chino Roces Avenue in Makati City. NORIEL DE GUZMAN

structure, in particular, has a “dampening effect” on the effi-ciency and productivity of workers. The group will be holding its an-nual conference in October. hRM executives are expected to tackle traffic, labor regulations and other challenges to encourage the entry of more foreign investments dur-ing the conference. PMAP will also take up gov-ernment initiatives, such as the

Labor department’s proposed four-day work week and f lexible working hours. The conference will be held in Manila from October 12 to 14. PMAP is expected to draft a list of recommendations on best practices in hRM and discuss the results of a survey among PMAP members and workers on the com-petencies of the future leaders of the country.

Friday, September 18, 2015

OpinionBusinessMirrorA6

Why is the quality of PHL universities dropping?

editorial

IT was not so long ago that employers subtly or directly did not want graduates from any but the country’s “top 5 schools.” That hiring strategy partly came about because of the large difference in the quality

of education between the top 5 and all the others. The other, and maybe more important factor for employ-ers, was that graduates from these schools probably had better contacts in the business world.

The local and global situations have changed in the last 20 years. A per-son’s network is still significant, but with the connections made through the Internet, personal relationships like classmates can be overshadowed in the short term. However, perhaps the more significant change has come from the changing landscape of education itself.

Businesses are looking just as much at the ability of a prospective em-ployee to be able to navigate through the technological and media world as through a history or philosophy class. This is the age of specialization not only in business but in the academic world. For example, one learning institution, Enderun Colleges, offers a Bachelor of Science in Entrepre-neurship degree that has a specific focus on teaching the second and third generation how to manage a family-owned company. Further, all major companies are looking at the global picture, as well as domestic opportu-nities, for their businesses.

In the 2015 ranking of global universities by Quacquarelli Symonds—a British company which evaluates universities on a range of performance indicators—the “top 4” did not do well.

From CNN Philippines: “The University of the Philippines [UP] slid from 367th last year to 401st to 410th. It was followed by the Ateneo de Manila University, which slid down to 501st to 550th place from last year’s 461st to 470th. The De La Salle University [DLSU] is placed at 701+ compared to 651st to 700th in 2014. The University of Santo Tomas remained at 701+, similar to its 2014 and 2013 ranking.”

A school is ultimately only as good as its faculty, and a closer look at the internals of the rankings show deficiencies in this area. Forty percent of the overall score is “Academic reputation” based on what other professors “believe the best work is currently taking place within their own field of expertise.” The UP rates a dismal 47 out of 100. Ateneo de Manila Uni-versity comes in worst at 32.8. DLSU is at 51 and the University of Santo Tomas is rated 40.

However, both DLSU and UP received improved rankings in the “employer reputation” indicator, so maybe local employers are still more concerned about “who you know” rather than “what you know.” 

ON August 28, 2015, the Commission on Elections (Comelec) signed a contract with SLI Global Solutions—an international certification entity—to conduct a series of

24 primary tests on the automated elections system we will be using for the 2016 national, local and Autonomous Region in Muslim Mindanao elections.

Tests

These primary tests are (get ready for a long enumeration): Hardware Test-ing; Electrical, Environmental, Print Legibility and 14-hour Battery Backup Power Test; Source Code Audit and Re-view; System Documentation Review; Configuration Audit; Readiness Test-ing; Reading Consistency Testing; Ballot Security Testing; Ballot Image Testing; Vote Secrecy Testing; Mark Sensitivity Test; Ballot Testing; Accuracy and Reli-ability Testing; System Integration Test (End to End Test); Security Testing; Data Encryption Decryption Testing; Digital Signature Testing; Access Levels Testing; Data Retention and Storage Testing; Data Backup Testing; Volume Testing; Stress  Test; Error Handling  and Error Recovery Testing; and a System Audibility Test.

There won’t be space enough in this article to describe all these tests in detail, and many of them are self-ex-planatory anyway, so let me just shine the light on a select few.

Let’s start with the environmen-tal tests.

First up, there’s the humidity stor-age test, which replicates stresses faced during the storage of voting machines and ballot counters. While in simulat-ed storage, the unit is subjected to 10 24-hour cycles of varying temperature and humidity. Then, the test unit will be subjected to very high temperatures. Like the humidity storage test, this tests the machines’ ability to withstand the rigors of storage.

However, since the machines are not going to be in storage forever, they will also face a bench handling test (to simulate stresses faced during maintenance and repair of voting ma-chines and ballot counters), a vibration test (to check the machines’ ability to withstand the rattling and shaking that happens during transportation between storage locations and poll-ing places), and a dust test that will

investigate the effects of, well, dust. Those of you who have had your

desktop computers seize up because of the accumulation of dust should know that this is a critical test.

Optical Mark Reader (OMRs) ma-chines will also be placed under a water dispenser with drip rate greater than 280l/m2/hr. The units being tested will be at least 1 meter from the drip dis-penser and will be exposed to uniform dripping for 15 minutes. I would have called this the water torture test, but for some unfathomable reason, SLI chose to call this the rain-drip test instead.

Apart from these environmental tests, electronic transmission testing will be conducted, as well.

SLI has developed a proprietary set of tools that simulate various transmis-sion rates of encrypted voting data for performance, load, volume and stress testing. The simulated network allows SLI not only to perform all the necessary functional, security and performance testing; but also to perform network monitoring (scanning, sniffing, etc.), encrypted strength analysis and simu-lating various network attacks.

SLI will use a load generation tool specifically tailored for the Philippines, to combine actual test traffic on the system along with simulated vote data. This will yield the combined traffic modeled load and expected transmis-sion behavior that the system will be tested against, determining whether the system will be able to handle the projected transmittal rated and the results on election day.

SLI will also validate that all systems

information is stored in nonvolatile me-dia, such that even if the system is turned off for a period of time, all data can still be retrieved. In data retention and stor-age testing, the voting system will be tested to verify that all election data can be simultaneously stored on redundant storage device, and that the data stored on the redundant storage device can be utilized to continue system operations in situations of malfunction or data error on the primary implementation.

In error handling and error recovery testing, voting systems can be subject to various conditions and when the sys-tem exceeds limitations errors. In other words, in testing, errors like incorrect settings, incorrect data inputs, incor-rect data outputs, corrupted data, errors in creation of media components, device startup errors, transmission errors and system integration errors will be forced in order to see how they are dealt with by the system. And since the misdiag-nosis of a problem can be just as big an issue as the problem itself, this testing suite will also determine whether the appropriate error messages are being generated in response to a specific error.

All of that is just scratching the sur-face, but I think it gives a pretty good idea of the thoroughness with which the vote counting machines are tested. Ultimately, the OMR machines we will use in 2016 will have probably survived more abuse than they are likely to see on election day itself. All to the good, I say.

James Arthur B. Jimenez is director of the Commission on Elections’s education and information department.

spoxJames Jimenez

Friday, September 18, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

annotationstito Genova Valiente

What’s on your playlist?the question was innocent. the person did not know

how days ago I struggled, with the help of a friend who was getting impatient with my requests, to include this song and that song even before he had loaded a previous title.

‘Gloomy Sunday’ on my playlistRoad or coordination congestion?

I come from a generation of taping and burning. this act of snapping songs from somewhere and making it part of a collection amazes me. Perhaps, in another period, this was stealing but the new media has altered all notions of property and location.

Indeed, what is on my playlist?Revealed on top of the list was

“Gloomy sunday.” the voice, my friend confessed, irritated him. It was Billie holiday’s. I smiled. I told him that voice will haunt him. I wanted to say, “hunt”. But his com-ments also haunted me.

My friend left soon, and I won-dered what he was thinking of this dear friend of his?

Interesting how mobile-phone playlists have supplanted divina-tions? songs or your choice of songs and voices can take the place of palmistry. these songs compiled are your dossier.

Realizing how playlists are al-most like boxers or briefs, I pro-ceeded to review my choices, the paths that I took with regard to songs that I anticipated would lull me to sleep during long rides or help me feel good at least when I was not doing any chore.

“Gloomy sunday” was there all right. I learned about the song from my grandmother, who spoke of a song that drove people to suicide. When I first got to travel abroad, I looked for this song and found it in one of those huge boxes con-taining several LPs or long-playing vinyl records. On the cover was a woman with gardenia on her hair. she was black and beautiful, I already knew her—Billie holi-day—through the biopic of Diana Ross. But it was the first time for me to hear her. Immediately, I un-derstood the critics who panned the film Lady Sings the Blues.

Ross mimicked holiday and did not portray her.

the idea of “Gloomy sunday” as a suicide song eluded me. What caught me was this singer with an uncanny voice, and who could slow down the song to almost a standstill.

the popularity of Youtube would soon show me the history of this song —fiction or fact. “Gloomy sunday” was originally a hungarian song but more than that generic label, it was called “the hungarian suicide song.” You have to be doubly careful when you say those words, because hun-garian sausages are quite popular this side of the moon.

the song is attributed to pianist Rezso seress in 1936, with Lazslo Javor writing the lyrics. the song

is described as having caused more suicides than any song in history.

In the posting at Youtube, a warning precedes the playing of the song, allowing the person about to listen to consider and reconsider his plan to partake of the song. the warning says: “the song will play in 10 seconds. Please exit now if you choose not to hear it.” In other words, the song has gained the no-toriety of not providing a musical backdrop to a depression but of in-ducing a person to contemplate and commit suicide.

Who takes song lyrics seriously that they become guide to action? I don’t think even those vision-and-mission guys really take songs and anthems to heart.

I open my playlist, and the voice of holiday creeps and crawls. It moans and menaces. It pleads and cries: Sun-day is gloomy/My hours are slumber-less/Dearest, the shadows I lived with are numberless/Little white flowers will never awaken you/Not where the black coach of sorrow has taken you/Angels have no thought of ever returning you/Would they be angry If I thought of join-ing you/Gloomy Sunday.

surely, there is an invitation to death in those lines.

It is said that the song was banned for years in some countries. this was

certainly no esoteric knowledge. What makes me wonder is how in holiday’s name did my grandmother, Emilia, get wind of this trivia when she was in the far-flung island of ticao. she was no blues singer; with her cousins, they sang sacred dirges during the holy Week.

My friend describes “Gloomy sun-day” as a dirge.

I continued my research till I came upon another version of “Gloomy sunday” in the reality competition Norway Got Talent. It is audition time and a young girl stands onstage. she is asked her age. “7”. she is asked what song she is going to sing. “Gloomy sunday” by Billie holiday. the girl opens her mouth and all mouths gape in the hall: her voice reeks of whisky and floats on wine and silken stories of heartbreaks. her name is angelina Jordan, and she sings her next song: “I’m a Fool to Want You.” she is Bil-lie holiday. In another posting, the judges were in awe still but one judge looked sad and troubled. angelina was singing: “Bang, Bang, I shot you down/Bang, bang, You hit the ground/That awful sound/Bang, Bang, My baby shot me down.

I wonder what’s on the playlist of 7-year-old angelina Jordan?

E-mail: titovaliente@yahoo.com

The corporate roller-coaster ride

Much befuddling than the average daily heavy traffic you have to deal with just to get to work is the fact that no one is exempted from corporate politics. If you have death

and taxes in life, politics form part of the office culture whether we like it or not. What only sets corporate politics uniquely apart in each office is how it occurs in varying degrees. It can be very subtle, but it can also be highly intense. the only thing to do is cope with it and deal with it.

EaGLE WatCHalvin ang

thE traffic challenge that is hounding Metro Manila is nothing new. It has been hounding us for decades now. some of us will remember the “Jingle Bags” and the

chocolate Boys in the 1990s, when the flyovers on Edsa were being built. Furthermore, road congestion (a better description of traffic) is a normal occurrence in many expanding cities around the world.

the Bangkok traffic was a leg-end of the 1990s. Recently, Jakarta has also been experiencing similar types of jams. so, if road conges-tion is a normal occurrence in our expanding metropolis, do we take it as a given? Do we simply give in to the request of the government for understanding? I believe that we need to go back and look at how we analyze road congestion. For, if the problem is not clearly identi-fied, all the proposed solutions will most likely exacerbate, instead of alleviate, the problem.

For all intent and purposes, road congestion exists because the supply of road is fixed in the short term (a perfectly inelastic condi-tion in Economics). Meanwhile, the demand for road is character-ized by various users—students (all levels), workers (government and private), business, leisure and movers. Each of the users has dif-ferent valuations of his or her road use, but the majority are forced by schedules to be in their schools and workplaces on set times.

Moreover, roads are generally not charged a fee so, in effect, they are “free” to use. this creates a condition where the demand for road exceeds significantly the sup-ply. this is a classic example of a common resource good. common resource goods have this property: road use is rival, meaning, when one car is on the road, other cars cannot be on the same road space. But it is nonexclusive, meaning, other road users cannot be prevent-ed from using the same road space. although there are people willing to pay a price for road use, it does not happen because the demand for free or lower-price use has over-whelmed supply tremendously (See graph from www.economics-online.co.uk).

under this condition, it is clear that, in the short term, road supply will be fixed. therefore, the first best solution of expanding the road network is not in the short term. the second-best solution is to tin-ker with demand. this, too, is not simple, because there are different valuations for road use. those who have fixed schedules have limited options, because changing schedules will affect the way of doing things. staggered business hours can only work to selected sectors, like private services. Other tinkerings, such as the number coding, traffic lights, traffic enforcers or traffic manage-ment, are not effective, because the different schemes that are in place

have loopholes in implementation. Moreover, they are implemented like broken lines, with each local govern-ment in Metro Manila having its own rules and having different levels of capacities to implement rules, adding to further congestion. combining all these conditions has made the traf-fic challenge no longer as an urgent issue, no longer as an emergency is-sue, but a disaster-level situation. the amount estimated to being lost in traffic daily should alarm the government to do more. With about 40 percent of gross domestic product being produced in Metro Manila, the national government cannot allow the current short-term conditions to go on and just plead for understanding.

the first thing that comes to mind is to put the full government resource to traffic management to full use. the budgets of the agencies under the Department of transpor-tation and communications, the Metropolitan Manila Development authority and the local government units on traffic must be consoli-dated to respond to the daily costs being lost. these resources must be implemented under a single coordi-nating mechanism that has author-ity over traffic management under the national government.

the current setup of the high-way Patrol Group taking over Edsa already shows that the national gov-ernment can come in to solve traffic. But without a single command line, efforts and impacts will be limited. With the full resource, the national government should have a standard set of rules for traffic management all over the Metro.

the agency that will be tasked to do this should be manned by profes-sionals, particularly those assigned in streets. their pay should be up-graded, commensurate to the cost that they are trying to abate.

the agency should be able to implement clearing of all roads, regardless if they are national or local. Part of its responsibility is also to plan phaseout of vehicles; no-parking, no-car policy for those buying cars; create pricing schemes; and road discipline and education, among others, and institutionalize them. this situation is called for, since the traffic problem is going to get worse before it will get better with the delays in the major infra-structure projects in the city. We are in a disaster condition, it does not merit soft and business-as-usual solutions, but hard and politically difficult ones.

how do you know when you’re in the throes of corporate politics? Ob-serve the work environment you’re in and the behavior of your workmates. It usually begins when one gossips about or tarnishes a colleague’s reputation to gain advantage. crab mentality is unmis-takably present when one tries to outdo one another by pulling the other party down. Ego-tripping is also a clear indi-cation that corporate politics is at play. When someone is secure about her role and position, he doesn’t need to abuse his authority just to point out his power.

according to www.management-studyguide.com, there are top reasons workplace politics continue to prevail. these are when employees aspire to be in the limelight easily without much hard work and depend on politics, when employees aspire to achieve something beyond their authority and control in a short span of time, lack of supervision and control at the workplace, too much of gossip at work, arrogant superiors

and jealous colleagues.Power struggles often, if not always,

happen in the corporate world. While ev-eryone is either at the center of it, one, at the very least, is a collateral damage. however, there are ways to combat the effects of corporate politics. this calls for basic things.

First, you have to be in a job that you love doing. this is a powerful shield one can have against negativity in the office setting. When your love for what you do overpowers the circumstances in the office, you’re at a stronger position. Re-gardless of what happens around you, you have the passion for work to keep you afloat and undistracted by all these matters.

second, do not ever compromise your moral values. Remember that moving up the corporate ladder by being morally corrupt isn’t worth it. Be on top not be-cause of favors but because of jobs well done. If you do this, you will survive and thrive beyond the company you’re

currently in. God can promote you every-where else. always ask for his wisdom and guidance when the temptation to compromise is strong.

to avoid being entangled in the web of corporate politics, you have to know where you stand from the get go. Draw your job description; fully understand what it calls for; and clarify job func-tions with the management. In doing this, confusions are avoided. It is also advisable to have an in-depth conver-sation with your immediate head to es-tablish expectations and understand-ing. set work goals as a team, so that it becomes a team effort and it unites the team to a common purpose.

One’s attitude also plays a major role in rising above corporate politics. trust your instinct when it comes to being pushed in a compromising situation. Whatever happens, stay professional. Put hard work, competence, respect and reliability ahead of your emotions. It is also important to be fair, and don’t be so quick to judge. Give people the ben-efit of the doubt, instead of being easily persuaded by what other people say or gossip about. always bear an open mind and have a sound judgment. assess justly.

When you find yourself at the center of corporate power struggle, overcome fears by reminding yourself that God places you in a season of trial to develop perseverance and character worthy of his name. acceptance is key, and don’t run away from problems. Yes, even work-related ones. having a support group will strengthen you. You’ll be surprised by how much friends would be willing to share your burden and help you out.

I can never stress enough how being deliberate in finding a mentor helps. We

cannot learn everything from school. You will benefit from the many lessons you could learn from the veterans of life experiences. Only seek mentorship and advice from competent and trust-worthy people.

Work life isn’t always going to be a bed of roses. No matter what the corporate life throws at you, whether you’re up or miserably down, consider the positive side of it. as you look for a mentor, be a mentor also and share your passion and dreams. stay focused on what matters in life. It’s a cliché but it’s a fact that when you find a job you love doing, you’ll never have to work a day in your whole life.

the most important reminder is this: Your boss is God. Everyone else is secondary. You work for him and not for men. the reason you have what you have right now, your job or promotion included, is because of his grace. Never lose sight of this.

Colossians 3:23-24: “Whatever you do, work at it with all your heart, as work-ing for the Lord, not for human masters,  since you know that you will receive an inheritance from the Lord as a reward. It is the Lord christ you are serving.”

Ailene Co is a member of BPW Makati. She is a seasoned marketing professional with close to two decades of experience in PR and marketing. She is also the cofounder of online magazine www.trend-hotspot.com. Falling twice and rising three times!

This article reflects the author’s opin-ion and is not the official stand of the BPW Makati. Women Stepping Up is a rotating column of members of BPW Makati and comes out twice a month. For more infor-mation on BPW Makati, visit www.wom-ensteppingup.org.

WomEn stEppinG Upailene Co

Price ofroadspace

PFree market

Price

FreeQuantity ofroadspaceCopyright www.economicsonline.co.uk

If roadspace isfree, demand will

exceed supply

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phFriday, September 18, 2015

Continued on A2

Asean open skies willgo on sans Manila OK

By Ma. Stella F. ArnaldoSpecial to the BusinessMirror

IT’S embarrassing. This was the reaction of aviation

expert Avelino Zapanta to the Philippines’s continued protection of Manila from foreign carriers, despite the rest of the member-nations of the Association of Southeast Asian Nations (Asean) agreeing to open up their capital cities.

“Nakakahiya nga, but it won’t stop the AsAm [Asean-single Aviation market],” he opined. AsAm takes full effect in December 2015, as Asean becomes one economic community. Zapanta, author of 100 Years of Philippine Aviation 1909-2009, the definite reference on airline man-agement in the Philippines, also said the Asean open-skies policy will spur local airlines to offer more intra-Asean routes. “I think some Philippine carriers will take advantage of AsAm, like Cebu Pacific. It has the resources and it is aggressive. It has ordered more ATR72s, ideal for the noncapital cit-ies of the other Asean countries, e.g., Zamboanga to sandakan and Puerto Princesa to Kota Kinabalu, among many others. I think, PAL Express

will do so, too. But the most aggres-sive will be Air Asia Zest, since AsAm is right down the group’s alley.” The Philippines continues to stall on the ratification of Protocols 5 and 6 of the 2009 multilateral Agree-ment on Air services (mAAs) that would give Asean airlines unlimit-ed third, fourth and fifth freedom rights to operate between capital cities. (See “PHL delaying Asean open skies,” in the Businessmirror, Sep-tember 17, 2015.) Zapanta, who is also president of the southeast Asian Airlines Inter-national, a charter service, said the Civil Aeronautics Board “has pro-posed the ratification of Protocols 5 and 6, but it has not been acted upon by the President [mr. Aquino].”

BATAAN PLANT TO HIKE PETRON’S MARGIN BY 20%PETRON Corp.’s upgraded refin-

ery in Bataan is expected to boost gross margin next year

by at least 20 percent, the oil firm’s top official said. Ramon S. Ang is confident that Petron will “achieve the target effi-ciency” of its single largest investment to date “sooner than expected.” As such, the anticipated efficiency, he ex-plained, will result in improved margin. “Even at low crude prices, Petron is still going to be very profitable be-cause of the modernization of the refinery. What we recover in crude now is up to 98.7 percent. Before, the oil refinery can only recover up to 76 percent. We hope, if possible, we can achieve 99 percent,” Ang said. Petron’s RMP-2 (Refinery Master Plan -2) is expected to be fully com-missioned next year. The $2-billion RMP-2 is still in its commissioning period, with actual commercial production to start next year. Output will improve by 50 per-cent—from 120,000 barrels average

per day to 180,000 barrels—by the time commissioning is completed. The upgraded refinery will drasti-cally increase production of gasoline, diesel and petrochemicals. It will also enhance the country’s supply security, since it gives more flexibil-ity to refine crude oil from various sources. More important, Petron will be capable of locally producing fuels that meet the more stringent Euro 4 environmental standard. “We are expecting the refinery to reach 98-percent recovery by next year, 2016. But as of September this year, we have already achieved it; so we believe that with this com-missioning, we will achieve our tar-get capacity and target efficiency,” Ang stressed. Having said that, the Petron official is confident that the upgraded refin-ery “should give you at least 20-per-cent gross margin,” from an earlier target of 15 percent and previous margins of 3 percent to 5 percent.

Lenie Lectura