January 2016. The government attributed this to weak farm output due to El Niño, which peaked in December 2015. In October last year the Trade Union Congress of the Philip-pines had projected that the number of farmworkers who could be displaced by El Niño could reach 1 million.

C A

PESO EXCHANGE RATES n US 46.1150 n JAPAN 0.4272 n UK 65.6585 n HK 5.9473 n CHINA 7.1408 n SINGAPORE 34.3322 n AUSTRALIA 35.0105 n EU 52.6034 n SAUDI ARABIA 12.2993 Source: BSP (12 April 2016 )

A broader look at today’s businessBusinessMirrorBusinessMirror

www.businessmirror.com.ph n Wednesday, April 13, 2016 Vol. 11 No. 186 P. | | 7 DAYS A WEEK

MEDIA PARTNER OF THE YEAR2015 ENVIRONMENTAL

LEADERSHIP AWARD

UNITED NATIONSMEDIA AWARD 2008

Feeding 1M farmers nowa problem due to El Niño

FARMERS, INDIGENOUS PEOPLES GO HUNGRY AS THEY LOSE LIVELIHOOD

Farmers suffer El Niño’s wrath

Remittance firms, forex dealers unregulated–BSP

BMReports

INSIDE

VR HARDWARE IS FINALLY HERE: WHAT YOU NEED TO KNOW

WHO ARE ALL THESE OLD PEOPLE?

LIFE D1

IMAGE D4

THE newspaper business is swiftly changing, which is why the BusinessMirror

has started publishing the Twitter accounts of its reporters, along with their stories. Hang out with our reporters and keep tabs on what’s happening. This is our way of providing you, our readers, to contact our reporters directly with feedbacks. The BusinessMirror cares about getting the details of our stories right, and we are also interested in hearing ideas for follow-up stories. We invite you to hang out with our reporters on Twitter.

T. Anthony C. CabangonPublisher @antoncab12

Hang out with BusinessMirror reporters on Twitter

@

BY F V. E | @elefantefil        

Special to the BM

THE idea of getting the rain to fall used to be the stuff of myth, legend or science fiction. The classic tale is of a sha-man performing a ritual to summon rain to fall to quench

the thirst of a parched land.In science fiction, the idea was known as weather manipula-

tion. Technology, not religious mumbo-jumbo, became the key to extracting enough moisture from the sky to make it rain.

Cloud seeding, as a practical tool for weather manipulation, was discovered accidentally in 1946 in the United States. Seventy years later, it is now considered a statistically reliable tool to in-crease precipitation in areas in need of moisture.

In the Philippines it has been used as constant institutional tool to deal with the effects of long dry spells or drought.

The first thing that comes to mind when one reads about cloud seeding is that it should produce rain. And when such efforts pro-duce no rainfall, the automatic reaction was that it failed.

It’s not that simple.

Evaporation rate“ONE thing that people have to consider is the evaporation rate,” Thelma A. Cinco of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) said. Cinco’s office comes up with climate-assessment reports that are designed to help the agricultural industry to adapt to changing climate conditions. “You have a limited supply of water for consumption,” explained STILL BULLISH SM Prime Holdings Inc. officials on Tuesday reported good financial results with strong income growth at the company’s

stockholders’ meeting, attended by (from left) SM Prime President Hans Sy, Corporate Secretary Elmer Serrano and SM Prime Chairman Henry Sy Jr. Story on page A12. NONIE REYES

ARRESTED farmers listen to final instructions before they are whisked away for their jail destination last Friday in Kidapawan City. MANUEL T. CAYON

B MA. S F. A @Pulitika2010

Special to the BM

LOC AL remittance f irms are operating in the Philip-pines virtually unregulated,

which could give rise to potential instances of money laundering and other illicit transactions. Bangko Sentral ng Pilipinas (BSP) Deputy Governor for the Su-pervision and Examination Sector

Nestor A. Espenilla confirmed to the BusinessMirror that while remittance agents—like foreign-exchange dealers and money chang-ers—are required to register with the monetary authority, the central bank does not have direct supervi-sion over remittance firms.

“There is no law today that explic-itly places the remittance business under BSP revision, unlike banks, nonstock savings and loan associa-tions, or even pawnshops,” he said. “Yes, we register them like

ere is no law

today that explicitly places the remittance business under BSP revision.”

—E

B M G P | _enren

THE number of Filipino farmers who could lose their livelihood due to the ongoing El Niño

episode could exceed a million, according to a labor expert from the University of the Philippines (UP).

935,000

Dr. Rene E. Ofreneo, former dean of the UP School of Labor and Industrial Relations (Solair), said the possibility that more than a million farm workers could be dis-placed by the drought is not remote. “El Niño is happening all over the country, so the level of displacement and the gravity of the problem is so

serious and comprehensive,” Ofre-neo told the BusinessMirror in a phone interview.

Citing data from the Philip-pine Statistics Authority, Eco-nomic Planning Secretary Em-manuel F. Esguerra said the agri-culture sector has recorded a net employment loss of 935,000 in

THE LATEST: PANAMA PAPERSOffshore bank accounts and other financial dealings in another country can be used to evade regulatory oversight or tax obligations. Panama, the Cayman Islands and Bermuda are among more than a dozen small, low-tax locations that specialize in handling business services and investments of non-resident companies.

The most active clients by number of offshore company incorporations were from Hong Kong, Switzerland and the United Kingdom.

Source: ICIJ, APGraphic: Staff, Tribune News Service

The 10 most popular tax havens

Countries with the most active intermediaries

British Virgin Islands

113,64848,360

Panama

Bahamas

15,915

British Anguilla

3,253

Seychelles

Niue

Samoa

Nevada

Hong Kong

United Kingdom

15,182

9,611

5,307

1,260

452

148

37,67534,301

32,682 15,479

8,6247,157

5,174

5,058

4,050

3,541

Hong Kong

Switzerland Luxembourg

Panama

Cyprus

Uruguay

Singapore

Russia

Isle of Man

United Kingdom

Offshore bank accounts and other financial dealings in another country can be used to evade regulatory oversight or tax obligations. Panama, the Cayman Islands and Bermuda are among more than a dozen small, low-tax locations that specialize in handling business services and investments of non-resident companies.

The most active clients by number of offshore company incorporations were from Hong Kong, Switzerland and the United Kingdom.

Source: ICIJ, APGraphic: Staff, Tribune News Service

The 10 most popular tax havens

Countries with the most active intermediaries

British Virgin Islands

113,64848,360

Panama

Bahamas

15,915

British Anguilla

3,253

Seychelles

Niue

Samoa

Nevada

Hong Kong

United Kingdom

15,182

9,611

5,307

1,260

452

148

37,67534,301

32,682 15,479

8,6247,157

5,174

5,058

4,050

3,541

Hong Kong

Switzerland Luxembourg

Panama

Cyprus

Uruguay

Singapore

Russia

Isle of Man

United Kingdom

n Venezuela’s chief prosecutor has ordered banks to freeze the accounts of people the country is investigating in connection with leaked documents that originated with a Panama-based law firm that helps set up secretive offshore bank accounts and shell companies. n Hungary’s prime minister says authorities have set up special investigative units to review any Hungarian aspects of the recently revealed offshore accounts. n Spain’s acting minister of industry, energy and tourism says he never ran or owned a Bahamian offshore company, and doesn’t know why his name appeared on leaked documents identifying him as a firm director. n British Prime Minister David Cameron has lashed out at “deeply hurtful and profoundly untrue” claims made about his late father’s financial arrangements. Cameron told lawmakers in the House of Commons on Monday his father set up an offshore firm for investment purposes and not to avoid tax. n A Spanish digital news site has published documents showing that Spain’s acting minister of industry, energy and tourism was a director of a Bahamian offshore company in 1992, three years before he entered politics. AP

Related story on A9

foreign-exchange dealers/money changers, but only for the narrow purpose of getting them to comply with the Anti-Money Laundering Act, since that law includes them as a covered institution. Thus, the oversight is quite limited.”

This developed as Internal Rev-enue Commissioner Kim S. Jacinto- Henares disclosed to senators in Tuesday’s continuing hearing of the bank heist that Philippine Remit-tance Ltd. (PhilRem) has not been paying the correct taxes since 2005.

“They are registered with us as a land-transportation contractor, not as a money changer or remit-tance company. They amended their articles of incorporation in 2005, but didn’t update their reg-istration with us,” Henares un-derscored. “So the taxes that they have been paying are wrong. As a nonbank financial interme- diaries, they’re supposed to pay a 5-percent gross receipts tax, not a VAT [value-added tax].”

Number of agricultural workers who already lost their source of livelihood due to El Niño, according to government data

Cloud seeding: Making a tested technology even better

C A

S “R,” A

Cinco, head of the Pagasa Impact Assessment Application Section, Climatology and Agronometerol-ogy Division. “To make it last, you ration the water. But it’s not just consumption. There’s also evapo-ration to consider.”

“For example, the evaporation rate for a given area is 5 millime-ters [mm] per day. To maintain an ample amount of moisture in that area, it must receive an average of 150 mm of rainfall per month,” she said. “But that’s assuming there is still moisture in the area. During a drought, the problem is that there is no longer moisture in that area.” When drought impacts the wa-ter supply, crop failure and reduced irrigation occurs. However, the drought’s effect is not confined to the agricultural industry.

The reduced water supply will result in less water for domestic use and adversely affect electrical pro-duction from hydropower sources.

Power outageCINCO explained that the drought and dry spell currently prevail-ing in Mindanao is comparable to the effects of El Niño that hit the country in 1998. Records show during that year,

water shortage in hydropower facilities reduced power genera-tion to just 34.61 gigawatt-hours (GWh), down from the previ-ously recorded 10-year average of 133.59 GWh. This was a stag-gering 74.1-percent reduction, resulting to power outages of several hours in Mindanao. Many expressed fears these outages will occur anew.

At present, publicly available re-cords show that the Mindanao elec-trical grid has a capacity to generate 1,445 megawatts (MW). However, the recorded peak demand for elec-tricity is 1,458 MW. The generating capacity is short by 13 MW. The deficit may increase with the onset of summer. “The El Niño effects will persist, most probably until June,” Cinco said. This means the priority for c loud-seeding operations are water-catchment areas, such as dams and lakes, because they both serve as the sources for hydropower, irrigation and water for human consumption.

Ma. Cecilia Monteverde, the weather bureau’s technical super-visor for its cloud-seeding project, agreed with the assessment.

This is where cloud seeding becomes a vital part of the drought

and dry-spell mitigation effort, according to Monteverde. “The first principle in cloud seeding is the presence of seedable clouds that can generate rainfall,” she explained. “Even if you have the seeding materials and there are no seedable clouds, we cannot generate rainfall. These seeding materials cannot form a cloud that can produce rain.”

Too hotPAGASA Cloud Seeding Project Coordination Officer Lorenzo A. Moron said “conditions must be favorable in order to produce rainfall.” “When conditions are favorable, the seeding materials enhance rainfall,” Moron added. “Clouds contain moisture,” Monteverde said. “However, not all clouds contain enough mois-ture to form rainfall that reaches the ground. The seeding materi-als are used to generate enough moisture to form large enough particles for rainfall that can reach the ground.” Moron cited as example their recent cloud-seeding project in Zamboanga. “If the climate is hot enough, the rainfall evapo-rates before reaching the ground,” Moron explained. “That’s what happened in Zamboanga. The heat evaporates the precipitation on the way down.”

Moron pointed out that the best period to conduct cloud-seeding op-erations is before the onset of the dry spell or drought.

“Any cloud-seeding operations conducted after that can produce some rainfall, but the moisture available will not be enough,” he added. “Our cloud-seeding operation is not a full-blown operation in nature,” Monteverde said. “We are under a science agency, so we focus

on research to improve the method-ology for cloud-seeding operations conducted by the BSWM [Depart-ment of Agriculture’s Bureau of Soil and Water Management], which is the mandated agency.”

Zambo lessonsMORON considered their attempt at Zamboanga as “not a total failure nor was it a total success.”

“The cloud-seeding operation did produce rainfall. Unfortunately, the rainfall occurred outside the target area,” he said. “It may not have provided a significant increase of water for the watershed, other people still benefited from the rain.” Water-catchment areas and watersheds are areas that Pagasa targets for its cloud-seeding oper-ations. “Other sectors are a second priority for our operations,” Moron explained. “The [DA-BSWM] is the lead agency for conducting cloud-seeding operations focused on agricultural areas.” Monteverde then emphasized the biggest drawback in all cloud-seeding operations. “Even if a cloud-seeding opera-tion is well-funded, if there are no seedable clouds, no rainfall can be produced,” she warned. “ That ’s why c loud-seeding operations must be approached through a scientific matter,” Mo-ron said. “We use various tools to determine the presence of ‘seedable’ clouds in a target area.” He added that a “seedable” cloud arrives only after “several days.” These scientists look for low lying cumulus convective clouds. Once such a cloud is spotted, the cloud-seeding aircraft then dis-perses a seeding material into the cloud. This is usually iodized salt.

New typesPAG A S A , t he go ve r n me nt ’s weather-monitoring agency, is now testing a new type of seeding material to improve the effective-ness of cloud-seeding operations in the Philippines. “We are now testing a new type of salt,” Monteverde said. “Before, we used iodized salt. The new type is more of a powder because the finer the salt, the more moisture it can attract.” “This new type is more buoy-ant in the air, giving in more time to attract more moisture in the atmosphere,” Moron added. “We can seed a larger area with 1 gram of the new powdered salt com-pared to 1 gram of the standard iodized salt.” Monteverde explained that this new powdered salt has an addi-tive to prevent it from clumping together, which helps maintain its powdery form.

Both Monteverde and Moron expressed confidence that Pagasa’s efforts will pay off by increasing

the amount of rainfall produced in cloud-seeding operations. “Science is a work in progress,” Monteverde said. “We always look at data to find out which method works best. This is an invest-ment. We find out what works best and turned that method over to the BSWM.”

A side f rom resea rc h a nd development, the scientists and technical experts of the weather bureau play another crucial role for cloud-seeding operations. “We determine if conditions are favorable for the conduct of c loud-seeding operations,” Monteverde said. “We use Doppler radar, upper air soundings, and other tools to detect and monitor the movement of potential seedable clouds,” Mo-ron added.

Unfavorable conditionsDESPITE unfavorable condi-tions, Moron said the weather bureau went ahead with the cloud seeding in Zamboanga, which was held in February. “For Zamboanga, based on climatology and climate records, there is really very little rain there during February,” he said. “It’s really dry and unfavorable for cloud- seeding operations. However, since it was an ur-gent request, we went ahead and used the opportunity to conduct further research and tests dur-ing the cloud-seeding operation. Despite the unfavorable condi-tions, we were still able to gener-ate some rainfall.” At least, according to him, the cloud-seeding operations provided relief, “especially when the target area is a dam, because a dam can store rainfall.” He also explained the reality when cloud-seeding operations are conducted in agricultural areas, especially over upland farms. “For agricultural areas, cloud- seeding operations provide tempo-rary relief, because the water easily evaporates,” Moron pointed out. There was one other benefi-cial effect that can occur even if a cloud-seeding operation does not produce rain. “One other point for cloud-seed-ing is this: Even in instances that rainfall is not produced, cloud-seeding operations can lower the temperature to slow down evap-oration,” Monteverde explained. “That is one positive impact. The seeded clouds tend to grow bigger. Bigger clouds over bod-ies of water help reduce the rate of evaporation.”

FailuresMONTEVERDE admitted “some-times cloud-seeding operations over Angat Dam do not produce rainfall.” “However, it was established that after the c loud-seeding operation, the rate of evaporation in the dam fell, helping the dam to sustain its water supply longer.” Moron explained, “The general objective of cloud seeding is to aug-ment freshwater resources.” “And when we talk of fresh-water resources, it is used for multiple activities,” Moron said. “[This resource is not only for domestic consumption, it is also for commercial and industrial purposes, such as agriculture and power generation.”

“ C l o u d - s e e d i n g o p e r a -tions must be multipurpose in approach,” he said. “We should not be conducting cloud-seeding operations solely to have water to drink. Cloud seeding is meant to increase freshwater resources for multiple uses and activities.”

“Cloud-seeding operation is not a guarantee that we will produce actual rainfall, because conditions vary from place to place,” Monte-verde added. “We, in Pagasa, are conducting research to determine the best conditions to help enable the present technology available to work efficiently.”

MOBILE radar Pagasa uses during cloud- seeding operations. (Left) Pagasa is testing powdered salt to improve the efficiency of cloud-seeding operations.

BusinessMirror www.businessmirror.com.ph Wednesday, April 13, 2016A2

BMReportsFarmers suffer El Niño’s wrath C

For agricultural areas, cloud- seeding operations provide

temporary relief because the water easily evaporates.”—P

If the climate is

hot enough, the rainfall evaporates before reaching the ground.” —P

BusinessMirror Special Featurewww.businessmirror.com.ph Wednesday, April 13, 2016 A3

BMReportsBusinessMirror news@businessmirror.com.phWednesday, April 13, 2015A4

Govt got ₧18.42B from Malampaya

Sebastian Quiniones, manag-ing director of Shell Philippines Exploration B.V. (SPEX), said last year’s remittance br ings the total royalties remitted to the government since the suc-cessful commissioning of the of fshore Pa l awa n project in 2001 to $8.7 bil l ion. SPEX is the upstream company leading the consortium that operates the Malampaya project.

“As of end last year, the total stood at $8.7 billion since the project’s inception,” Quiniones told the BusinessMirror. “For 2015 alone, the government’s share amounted to $400 million.” The amount is what the chairman of Nike Inc. reportedly pledged to give to Stanford University for a corporate social-responsibility program addressing poverty and climate change.

Quiniones said last year’s pay-ment was lower than the previous years’ remittances, because of the decline in the prices of oil and gas, which had an impact on pricing.

“The $400-million remittance in 2015 was much lower than a year ago, because the price of oil plunged during the year as compared to 2014,” the SPEX official said.

In 2014 the consortium remit-ted around $900 million in royalty payment. “Oil prices have dropped by half so roughly speaking, the amount that was remitted turned out also,” Quiniones said.

A basket of indexes, including oil prices, dictates the price of gas that is sold by the consortium to power producers utilizing the natural gas to fire up their power plants.

T he i nd igenou s g a s f rom the f ield fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts, accounting for roughly 45 percent of Luzon’s power-generation requirements.

These power plants are the

1,000-MW Santa Rita and the 500-MW San Lorenzo plants, ow ned by t he L opez Group; and the 1,200-MW Ilijan plant, owned by Kepco Philippines.

Ma lampaya roya lt ies have so far been used for the fuel requirements of the National Power Corp.-Small Power Utili-ties Group (NPC-SPUG) amount-ing to P2 billion; Pantawid Pas-ada program, P450 million; and P423 million for the purchase of

the USS Hamilton cutter marine vessel to strengthen the securi-ty perimeter of the Malampaya Natural Gas Project.

The Malampaya project is a joint undertaking of the Philip-pine government and the private sector. The project is spearhead-ed by the Department of Energy, and developed and operated by SPEX with a 45-percent stake on behalf of joint-venture partners Chevron Malampaya Llc.—also with a 45-percent stake—and PNOC Exploration Corp. The latter holds the remaining 10 percent. Under the service con-tract agreement, 70 percent of the gross proceeds from the sale of natural gas would go to the contractor to recover the investment cost. The remain-ing 30 percent is shared by the government and the consortium on a 60-40 basis, respectively.

Upon its discovery, Malam-paya had about 2.7 trillion cubic feet of natural-gas reserves and 85 million barrels of condensate,

located some 3,000 meters below sea level. Last year the consor-tium inaugurated a new offshore platform that would maintain the level of gas production to fulfill commitments under existing gas sales agreements, thus ensuring the steady supply of natural gas to power the Luzon electricity grid.

The new offshore platform—Deplet ion Compression Plat-form (DCP)—is adjacent to the ex ist ing Ma lampaya Sha l low Water Platform, located some 50 k i lometers offshore from Palawan in western Philippines. Both the existing Shal low Wa-ter Platform and the new DCP are designed to withstand ty-phoons and earthquakes which the Phi l ippines exper iences.

“Malampaya is a symbol of the country’s continuous journey toward energy self-sufficiency,” Quiniones said. “The commission-ing and start-up of its latest phase is a testament to what the Filipino work force can achieve to fuel the country’s growth and progress.

B J R. S J@jrsanjuan1573

THE Court of Appeals (CA) has referred to the Office of the Court Administra-

tion (OCA) for investigating a trial court judge who stopped the implementation of a final and executory decision it issued and affirmed by the Supreme Court (SC). T he C A dec ision t hat t he judged stopped from being im-plemented ordered the eviction of wholesale and retail chain Uniwide Holdings Inc. (UHI) from the Coastall Mall property in Parañaque City and to pay al-most P1 billion in unpaid rental and liquidated damages. 

In a 20-page decision writ-ten  by Associate Justice Ramon Cruz, the CA’s former Seventh Division said the actuations of Judge Rolando How of Branch 257 of the Regional Trial Court in Parañaque were “an affront to the CA and SC.”

“His attempt to forestall a final and executory judgment of no less than the highest tri-bunal of the land constitutes a disrecpectful and insolent de-fiance of the authority and im-pedes the speedy administration of justice,” the CA ruled.

On March 4, 2015, the SC issued an entry of judgment stating that the order by the Metropolitan Tri-al Court (MTC) in Parañaque City Branch 78 on September 28, 2010, and the CA ordering UHI to vacate the 100,000-square-meter prop-erty of Manila Bay Development Corp. (MBDC) owned by business-man Jacinto Ng has become final and executory. However, in an order issued on November 5, 2014, How granted the petition filed by UHI seeking the issuance of a writ of prelimi-nary injunction against the im-plementation the said final and executory  decision, saying that the order to vacate was “prema-ture and void”.

“Had he thoroughly reviewed the records of the case, it would have been impossible for him to miss or to misread the import of

the said resolutions. By his acts, Judge Rolando How has tried to prevent MBDC from enjoying the fruits of its hard-earned legal victory,” the CA said.

“In effect, he has been tying the hands of justice and prevent-ing it from taking its due course. His conduct has thwarted the due execution of a final and ex-ecutory decision,” the appellate court added. The CA said How must answer why he should not be sanctioned for his failure to properly apply the relevant laws, rules and ju-risprudence. “When the laws are sufficiently basic, a judge owes it to his office to simply apply it, and anything less than that would be constitutive of gross ignorance of the law,” the CA pointed out. 

Concurring with the ruling were Associate Justices Noel Ti-jam and Romeo Barza. In 1993 MBDC leased  to busi-nessman Jimmy Gow the subject property at the Central Business Park II Complex, Reclamation Area in Parañaque City.

Gow subsequently assigned his rights and interests to UHI, which failed to pay monthly rent-als. MBDC also discovered that UHI had not been paying realty taxes on the improvements it made on the property. This prompted MBDC to file a complaint for unlawful detainer and damages before the MTC in Parañaque, seeking to direct UHI to vacate the premises and to pag their rentals in arrears and reim-burse MBDC for payments made on realty taxes. In a ruling issued in Septem-ber 2010, the MTC in Parañaque directed UHI to vacate the sub-ject property and to pay MBDC the amount of P715.73 mil l ion, representing accrued renta ls and l iquidated damages, with legal interest at the rate of 6 percent per year from the date of judgment. The CA affirmed the said ruling with some modi-fications, which prompted UHI to elevate the matter before the SC. In a resolution issued on April 7, 2014, the SC denied

By his acts, Judge Rolando How has tried to prevent MBDC from

enjoying the fruits of its hard-earned legal victory.” —C A

A PHILIPPINE d iplom at warned on Tuesday that any Chinese move to turn a

disputed shoal, where the US Navy recently spotted a suspected Chi-nese survey ship, into an island will escalate the disputes in the South China Sea, and asked Washington to convince Beijing not to take that “very provocative” step.

Phi l ippine A mbassador to Washington Jose Cuisia Jr. told a news conference in Manila that a senior US Navy official reported spotting a suspected Chinese sur-vey ship in the Scarborough Shoal a few weeks ago and expressed concern about its presence in the disputed offshore area.

The Philippine military checked but found nothing, possibly be-cause the Chinese ship later left the shoal, he said.

China has said it has completed construction work to turn seven reefs into islands in the disputed Spratlys archipelago in the South China Sea, raising alarm in the region and sparking calls by Asian and Western governments for China to stop taking provocative actions that can lead to confron-tations. Beijing says it owns the Spratlys, which it calls the Nansha Islands, and has a right to under-take construction there.

The US Navy sighting of the survey ship in Scarborough, a rich fishing area about 230 ki-lometers (145 miles) west of the Philippines, has reinforced sus-picions that Beijing is eyeing the vast atoll as its next target in its island-making spree, Cuisia said.

“That, I think, will be very pro-vocative if they will build on Scar-borough Shoal,” Cuisia said, adding such an action “will further esca-late the tensions and the conflict.”

The Philippines is incapable of stopping China from con-structing an island in the shoal, where Filipino fishermen have been barred by Chinese coast-guard ships, Cuisia said. “We hope that the US and other coun-tries...would convince China not to proceed with that,” he said.

Washington does not take sides in the disputes involving China, the Philippines and four other governments but has declared that ensuring freedom of navigation and overflight in the busy waters is in its national interest.

Cuisia said he was involved in a US State Department-brokered deal for China and the Philippines to withdraw their ships simultane-ously from Scarborough to avoid a potential clash during a tense standoff in 2012.

China reneged on that deal by re-fusing to withdraw its ships, after

the Philippines did and now claims there was no such deal, he said.

“We were shortchanged,” Cui-sia said. China, meanwhile, said the Group of Seven(G-7) nations should stop inflaming territorial disputes in Asian waters and fo-cus its energy on dealing with a slumping global economy. This was in response to G-7 calls for countries to stop land reclama-tion and militarization in one of the world’s busiest shipping lanes.

“China is strongly dissatisfied with relevant moves taken by G-7,” Foreign Minister Spokes-man Lu Kang said in a statement on Tuesday. “We urge G-7 mem-bers to abide by their promise of not taking sides on territorial disputes, respect the efforts by regional countries, stop all irre-sponsible words and actions, and make constructive contribution to regional peace and stability.”

The G-7 should have focused on righting a sluggish global economy, “instead of hyping up maritime issues and fueling tensions in the region,” he said.

Lu’s remarks were in response to G-7 foreign ministers raising concerns over tensions in the East China Sea and South China Sea,

where China has been more ag-gressively asserting its territorial claims under President Xi Jin-ping. China “resolutely upholds its territorial sovereignty and maritime rights and interests,” in the waterways, Lu said.

Artificial islandsSINO-JAPANESE tensions have been on the rise over a chain of uninhabited islands in the East China Sea claimed by both coun-tries, while China’s bid to control more than 80 percent of the South China Sea overlaps with claims of five other countries.

China has constructed artifi-cial islands there, some with air-strips capable of landing military aircraft. Last year the US began to challenge China in the South China Sea by sailing warships near the islands in so-called freedom of navigation operations.

The G -7 foreign ministers urged “all states to refrain from such actions as land reclamations, including large-scale ones, build-ing out outposts, as well as their use for military purposes and to act in accordance with interna-tional law, including the prin-ciples of freedoms of navigation

and overflight,” in a statement released at the close on Monday of a two-day meeting in Hiroshima.

The statement didn’t mention China directly, which is a not a G-7 member. None of the five other states claiming territory in the South China Sea participated in the meeting. An editorial in the official Xinhua News Agency ac-cused Japan of trying to use the G-7 to “contain China” and trying to divert China’s attention from the East China Sea by “interferring in disputes in the South China Sea.”

The South China Sea is a fertile fishing ground and hosts $5 tril-lion in annual shipping. Vietnam, the Philippines, Brunei, Malaysia and Taiwan also have claims in the South China Sea that fall within China’s nine-dash line, the delin-eation of its claims that first ap-peared on a 1947 map.

China has deployed missiles, ra-dars and fighter jets in territory it controls in the area and has stepped up its naval patrols in the waters and regular drives off Southeast Asia fishermen.

“The G-7 is going through the motions of making it clear to China that if they do something more, there will be a cost to bear,” said Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra. “The G-7 statement gives the Americans a much stronger base to go to their key allies, including Australia, to get them to act in concert with them.” AP, Bloomberg News

Cuisia to China: Don’t turn shoal into island

PHILIPPINE Defense Secretary Voltaire T. Gazmin pours champagne on the nose of the C-130T military transport plane that was acquired from the US as part of the armed forces modernization program during a ceremony on Tuesday in Pasay City. US Ambassador to the Philippines Philip Goldberg (fourth from left), who also attended the commissioning ceremony, announced the aircraft is one of the two aircraft to be delivered in the �rst quarter of the year with a total value of $55 million. Others in photo are (from left) Army Chief Lt. Gen. Eduardo Ano, Air Force Chief Lt. Gen. Edgardo Fallorina and Armed Forces Chief Gen. Hernando Iriberri. AP

Court of Appeals asks OCA to probe Parañaque judge over Uniwide Holdings case

B L L@llectura

THE Philippine government received last year $400 million (roughly P18.42 billion) as

its share of the income from the Malampaya deepwater gas-to-power project, an official of the Malampaya consortium said.

That, I think, will be very provocative if they will build on

Scarborough Shoal.” —C

2.7TThe total cubic feet of natural-gas reserves located some 3,000 meters below sea level discovered at the Malampaya natural-gas field in the West Philippine Sea

BusinessMirrornews@businessmirror.com.ph Editor: Max V. de Leon • Wednesday, April 13, 2016 A5

AseanWednesday

$1B

Alibaba expands in Southeast Asian market via Lazada deal ALIBABA Group Holding Ltd.

expanded its e-commerce footprint to fast-growing

Southeast Asia with a $1-billion deal for control of Lazada Group SA, as it seeks more sales from beyond China.

The company will pay $500 mil-lion for new shares in the closely held company and also purchase stock from existing investors, Alibaba said in a statement on Tuesday. Investors in Lazada to sell stakes include Rocket Internet SE, Tesco Plc. and Investment AB Kinnevik.

Billionaire Alibaba Chairman Jack Ma has set a goal of getting at least half the company’s revenue from overseas, with the Lazada deal adding sales of clothing and electronics in six Southeast Asian markets. While Alibaba has come to dominate e-commerce in its home market, it remains dependent on China for the vast majority of its business.

“It has huge cash sitting on its balance sheet so it can do this kind of investment. It’s also seeking for some future growth drivers,” said Marie Sun, an analyst at Morning-

Value of Alibaba’s agreement with Lazada

million people.“Overseas expansion requires a

lot of investment in logistics, it would take Alibaba much longer to build the business from the ground up,” said Li Yujie, an analyst with RHB Research Institute Sdn. in Hong Kong. “What Alibaba could do is integrate the busi-nesses and introduce more existing merchants to Lazada to export their products overseas.”

The deal also includes options to buy out certain Lazada shareholders

in a 12- to 18-month period after the deal closes, it said. Credit Suisse Group AG advised Alibaba, while Goldman Sachs Group Inc. was fi-nancial adviser to Lazada.

“With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven man-agement team and a solid founda-tion,” Alibaba President Michael Evans said in the statement.

Bloomberg News

CAMBODIAN police have charged an opposition lawmaker who has been a strong critic of the

government’s handling of demarcating the border with neighboring Vietnam, reviving a campaign of pressure Prime Minister Hun Sen launched last year against his foes and critics.

Um Sam An was arrested on Monday and charged on Tuesday, apparently in connection with his remarks last year on the border issue. Journalists were not allowed into the court.

He was charged with incitement to commit a criminal act and inciting preju-dice against another country and faces up to five years in prison if convicted, said his defense lawyer Sam Sokong. The charges carry penalties of up to two years in prison and three years, respectively.

One of his colleagues in the Cambo-dia National Rescue Party, Sen. Hong Sok Hour, is facing trial on several charges after making similar criticisms last year implying that the government failed to counter land encroachment by Vietnam, Cambodia’s traditional enemy. Hun Sen has been in power for three decades. While Cambodia is formally demo-cratic, his government is authoritarian and known for intimidating opponents.

Last year he put an end to an uneasy detente with the opposition party, with which he had reached a political truce in 2014 to end a boycott of parliament. The opposition mounted a surprisingly strong challenge against Hun Sen’s Cambodian People’s Party in the 2013 general election, which it accused the government of stealing.

The opposition has faced physical

and legal intimidation, and politically motivated legal actions against char-ismatic opposition leader Sam Rainsy have convinced him to stay abroad.

The opposition, for its part, had sought to capitalize on its election gains by hitting Hun Sen on the sen-sitive issue of relations with Vietnam, with some of its lawmakers charging that Cambodia was losing land to its neighbor. Hong Sok Hour was arrested last August after Hun Sen accused him of treason for an online posting, which included the purported text of a 1979 treaty with Vietnam that declared that their mutual border would be dissolved.

Hun Sen, who was foreign minister at the time in a government installed by a Vietnamese occupation force that invaded Cambodia to oust the murder-ous Khmer Rouge regime, insisted the treaty was forged. Hong Sok Hour ap-parently had reposted a bad translation of a document he found on the Internet, and was indicted on three charges, in-cluding falsifying public documents, us-ing fake documents and inciting chaos. The charges carry maximum sentences of 10 years, five years and two years, respectively.

Um Sam An, who pursued the same issue, was arrested in the northeastern city of Siem Reap shortly after midnight on Sunday. He had just returned from a trip to the United States.

His Cambodia National Rescue Party decried his arrest, saying it breached his immunity as a lawmaker. The govern-ment rejects such claims, saying such arrests are allowable because the law-makers have been caught in the act of committing a crime. AP

Cambodian police charge critic of border policy

star Investment Service. “It needs to find some other place for future growth.”

The agreement values all of Lazada at $1.5 billion, Rocket said in a separate statement.

Buying its way inFOUNDED in 2012 by Rocket, Lazada operates in Indonesia, Ma-laysia, the Philippines, Singapore, Thailand and Vietnam. Indonesia, where it competes with Tokopedia and MatahariMall, is Southeast Asia’s largest economy, with 256

The WorldBusinessMirror news@businessmirror.com.phWednesday, April 13 2016A6

Zika threat wider than originally thought, White House official says

DR. Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention speaks about the Zika virus in front of a US map of the ranges of two di�erent types of mosquito on Monday, during the daily news brie�ng at the White House in Washington. AP/JACQUELYN MARTIN

But even as officials were deliv-ering that new warning, Speaker Paul D. Ryan’s office questioned the White House’s approach for combating the virus spread at home and abroad.

US health officials warned on Monday that the mosquitos that carry and spread the Zika virus are present in 30 states, not the dozen feared previously.

The virus is now believed to af-fect women throughout their preg-nancies, rather than during just the first trimester, Anne Schuchat, principal deputy director of the

Centers for Disease Control and Prevention, told reporters at the White House. In addition to be-ing linked to microcephaly, a birth defect, and one serious autoim-mune nervous disorder, officials say there are growing links be-tween the virus and neurological conditions. Officials do not expect a wide-scale outbreak in the con-tinental United States, Schuchat said, “but that doesn’t mean we won’t have a big problem.”

The health officials warned they lack funds to head that off, even after they transferred nearly $600

million in existing funds from other accounts to anti-Zika efforts.

Health agencies need the full a mount in emergenc y f und-ing the Obama administration asked for: $1.9 billion, National Institutes of Health Director Anthony Fauci said. Still, he told reporters at the same briefing that he “can’t imagine” Con-gress won’t eventually dole out the funds, especially as experts learn more. On Capitol Hil l Re-publican lawmakers remain hes-itant to cut a $1.9-billion check, especially since the sum would breach federal spending caps.

“We’re glad the administration has agreed to our request to use existing Ebola funds to address the Zika epidemic,” Doug Andres, a Ryan spokesman, said in an e-mail.

“If additional Zika resources are needed, those funds could and should be addressed through the regular appropriations process,” Andres said. GOP appropriators earlier this month declared vic-tory when the White House de-cided to shift monies away from

programs targeting Ebola, malar-ia and tuberculosis, and toward anti-Zika efforts.

“More than a month ago we called on the administration to use existing funding and legal authorities to provide the most immediate and effective response to the Zika outbreak,” House Ap-propriations Chairman Harold Rogers, Republican-Kentucky, and other senior GOP members of that panel said in an April 6 statement. “We are pleased to

hear today that federal agencies are heeding our call.”

Republicans have yet to take a firm position on whether they believe additional Zika dollars will be needed this fiscal year.

“We will look carefully at the details of today’s proposal by the administration to ensure the best and most effective use of these funds, and to provide proper over-sight,” Rogers and the other appro-priators said.

“As we move forward, the Appro-priations Committee will continue to monitor the changing needs resulting from this unpredictable crisis to assure the resources neces-sary for the response are available.” Meantime, in an ominous finding, Schuchat said there could be hun-dreds of thousands of Zika cases in Puerto Rico. Such outbreaks are another reason Congress should allocate the funds, Schuchat and Fauci told reporters. That’s because the US is working closely with Ca-ribbean and Latin American coun-tries on countering the disease, they said. TNS

30Number of US states where Zika virus

is present

L IM A, Peru—Keiko Fuji-mori, daughter of former President Alberto Fujimo-

ri, and former Finance Minister Pedro Pablo Kuczynski appeared headed for a June runoff to de-termine the winner of Peru’s presidential race, partial elec-tion results indicated on Monday.

Keiko Fujimori received 39.5 percent of the votes cast in Sun-day’s election, while Kuczynski received 22.1 percent, with more than two-thirds of the ballots counted, according to Peru’s elec-toral commission, known by its Spanish initials ONPE. About 83 percent of the first-round ballots were counted by late on Monday, officials said.

Kuczynski’s lead over candi-date Veronika Mendoza, a socialist member of Congress who had about 18 percent of the vote, looked to be enough to ensure him the runoff spot against Fujimori on June 5, analysts said. A winning candidate

needed 50 percent of votes plus one to avoid the second round.

Fujimor i ’s Fuerza Popu lar party a lso scored signif icant victories in the congressional portion of the election and was on track to win at least 65 of the 130 legislative seats up for grabs. Although the 40-year-old Fujimori, a two-term member of Congress, would seem to be a prohibitive favorite against Kuczynski, polling firms have said the 77-year-old former min-ister has a chance of beating her in the runoff because of high anti-Fujimori sentiment in Peru.

T he e l d e r Fu j i mor i , w ho served as president from 1990 to 2000, was convicted in 2009 on corruption and human-rights abuse charges and is serving a 25-year prison term. A signifi-cant portion of Peruvians fear his daughter might bring back his authoritarian ways and say they wouldn’t vote for her under any

circumstance. Also warning of a strong Kuczynski challenge was Boston University professor and Peru expert David Scott Palmer, who said the nearly 40 percent of votes collected by Fujimori on Sun-day could turn out to be the “ceil-ing” or maximum support among Peruvians. But Lima-based politi-cal science Prof. Alberto Vergara disagreed, saying Kuczynski may have too much ground to make up. He said the second-place finisher in the first round of a presidential election has never won after losing to the first place finisher by such a wide margin.

W ho gains the support of Mendoza voters could be critical in determining the outcome of the June election. Popular es-pecial ly in southern provinces, Mendoza capitalized on grow-ing sentiment against miners and natural gas developers to mount a late surge in the polls.

Los Angeles Times/TNS

Peru’s Keiko Fujimori, ex-finance minister appear headed for a runoff

PRESIDENTIAL candidate Keiko Fujimori waves at supporters from the hotel where she is staying at to await the results of the general elections in Lima, Peru on Sunday. Exit polls pointed to Keiko, the daughter of jailed former President Alberto Fujimori, emerging with the most votes, though not the simple majority needed to avoid a runo� election. AP/MARTIN MEJIA

CHINA REPORT SOUNDS ALARM ON GROUNDWATER POLLUTION BEIJING—More than 80 percent of China’s underground water drawn from relatively shallow wells used by farms, factories and mostly rural households is unsafe for drinking because of pollution, a government report says. The Water Resources Ministry study posted to its web site on Tuesday analyzed samples drawn in January from 2,103 wells used for monitoring in the country’s major eastern flatland watersheds.

The ministry said that of those samples, 32.9 percent were classed as suitable only for industrial and agricultural use, while 47.3 percent were unfit for human consumption of any type. None were considered pristine, although water in wells in the Beijing area was rated better overall than elsewhere in the northeast. Following the report’s release on Monday, officials sought to reassure the public that most household water used by urban Chinese households is safe because it comes from reservoirs, deep aquifers or rivers that are treated to ensure safety.

“The quality of drinking water is good overall,” Chen Mingzhong, director of the ministry’s Department of Water Resources, told reporters at a news conference.

Most public attention in recent years has focused on heavy air pollution in Chinese cities, although water and soil contamination are also regarded as serious by environmentalists. Water shortages are also expected to pose an increasing challenge to agriculture, with much of the arid North China Plain reliant on aquifers whose levels are falling fast. China’s major lakes are also heavily polluted, largely due to fertilizer runoff and the dumping of untreated factory waste. AP

ARGENTINA’S FERNANDEZGETS HERO’S WELCOME BEFORE COURT DATE BUEÑOS AIRES, Argentina—Supporters of former President Cristina Fernandez gave her a hero’s welcome on Monday night at a Buenos Aires airport before she faces a court over her possible role in an alleged scheme to manipulate Argentina’s currency.

Fernandez dominated the political landscape during eight years in office and left last December with high-approval ratings despite economic woes and links to corruptions scandals. Since ending a tenure marked by near daily television speeches and constant tweets, she has lived away from the limelight in her home in the southern province of Santa Cruz.

Flanked by police and illuminated by camera flashes, Fernandez smiled and waved at thousands of sympathizers who encouraged her with banners and chants ahead of her testimony on Wednesday.

She is being investigated for possible involvement in a purported scheme to manipulate financial markets to keep the Argentine peso’s value inflated, leading to a plunge in central bank reserves.

A federal prosecutor also recently asked to include her in two separate investigations involving allegations of money laundering. In addition, a businessman with close ties to her family has been arrested in another corruption probe. AP

briefs

WASHINGTON—�e Zika virus is a threat to more states than first feared,

underscoring the need for Congress to approve the Obama administration’s nearly $2-billion funding request, senior health officials said on Monday.

The WorldBusinessMirrornews@businessmirror.com.ph Wednesday, April 13, 2016 A7

AUSTRALIAN business confidence jumped and an employment gauge in the

survey surged to the highest in almost five years, signaling a healthy job market and reducing the likelihood of an interest-rate cut.

AS JOBS GAUGE HITS 5YEAR HIGH

Aussie business confidence surges

The sentiment index doubled to six points last month, accord-ing to a National Australia Bank (NAB) Ltd. survey of more than 400 firms conducted from March 23 to 31. The business condi-tions gauge—a measure of hiring,

sales and profits—climbed to 12, matching the highest level since before the 2008 global financial crisis. The employment index jumped four points to five, its best result since 2011. “This is an es-pecially good result in the context

of a downbeat global economic outlook,” said Alan Oster, chief economist at NAB. “Low interest rates and a more competitive cur-rency, even given recent strength, are expected to remain key driv-ers domestically. Consequently, our outlook for the economy re-mains unchanged—and with the nonmining recovery expected to progress further, monetary policy is likely to remain on hold for an extended period.”

Australia’s economy is proving resilient in the shadow of recent financial turbulence in China, negative interest rates in Japan and Europe and weaker commod-ity prices that have combined to increase global risk.

The Reserve Bank of Australia

cut rates to a record-low 2 percent in May last year in an easing cycle designed to cushion the economy from unwinding mining invest-ment and encourage ser vices industries to pick up the slack. While GDP grew a robust 3 percent last year and the unemployment rate has fallen to 5.8 percent, the

currency rebounded more than 10 percent since mid-January to 75.86 US cents at 11:18 a.m. in Sydney. Traders are pricing in a 36-percent chance of a rate-cut next month, according to swaps data compiled by Bloomberg. It’s complicatedRBA Governor Glenn Stevens, in a statement after leaving the cash rate unchanged last week, warned that “under present circumstanc-es, an appreciating exchange rate could complicate the adjustment under way in the economy.”

The renewed currency conun-drum reflects the Federal Reserve’s caution on the speed of its policy tightening and a rebound in iron ore, Australia’s biggest export. It

placed at risk the sustained labor-market improvement and burgeon-ing tourism and education indus-tries that are boosting services exports’ share of GDP.

Yet, Tuesday’s business-confi-dence report suggests firms are weathering the changes. “With this result, the long-running upward trend in business conditions has resumed, suggesting the nonmin-ing recovery is becoming more entrenched, brushing aside the challenges faced from offshore,” Oster said. “The rise in employ-ment conditions put the index back on its strong upward trend, to be more consistent with solid employment growth outcomes in the official labor statistics.”

Bloomberg News

LONDON—Br it ish Pr ime Mi n ister Dav id  C a mer -on fought back on Monday,

after days of criticism over his finances, lashing out at what he called hurtful and untrue claims about his late father’s invest-ments sparked by leaked details about the offshore accounts of the rich and famous. Trying to restore his govern-ment’s shaken reputation, Cam-eron insisted that “aspiration and wealth creation are not somehow dirty words” and said Britain was acting to stop evasion in its overseas tax havens.

C a meron  h a s be e n u nder mounting pressure since his father, Ian Cameron, was iden-tified as a client of a Panama-nian law firm that specializes in helping the wealthy reduce their tax burdens.

The prime minister initially refused to say whether he had a stake in Blairmore Holdings, an offshore firm established by his father, before acknowledging he had sold his shares in it shortly before he was elected in 2010.

“I accept all of the criticisms for not responding more quickly to these issues last week,” Cam-eron told lawmakers in the House of Commons. “But as I said, I was angry about the way my father’s memory was being traduced.”

Cameron  said his father had set up an investment fund over-seas so it could trade in dollar securities—“an entirely standard practice, and it is not to avoid tax.” He said millions of Britons had in-vestments in such funds through their workplace pensions. Cam-eron said “there have been some deeply hurtful and profoundly untrue allegations made against my father,” who died in 2010.

Revelations about the Camer-on family finances—found among more than 11 million documents from the Panamanian law firm Mossack Fonseca—have over-shadowed the government’s claim that it is committed to closing tax loopholes.

C a meron  ha s c ha mpioned greater financial transparency, and is due to host an interna-tional anticorruption summit in London next month.

A law requiring British com-panies to disclose who real ly benefits from their ownership comes into force in June.  Cam-eron  said on Monday that Brit-ain’s Crown dependencies and overseas territories—including such tax havens as Jersey and the British Virgin Islands—had also agreed to share beneficial ownership information with UK law-enforcement bodies.

The prime minister, a former

PR man with a reputation for sharp polit ica l intuition, ap-peared to be caught off-guard by the tax furor. His office ini-tially insisted that his financial arrangements were private, be-fore acknowledging that  Cam-eron and his wife had sold some £30,000 ($44,000) in shares in the offshore fund shortly be-fore he became prime minister in 2010, to avoid any potential conflict of interest.

Final ly, on Sunday  Camer-on  published a summary of his tax returns since 2009, becom-ing the first British leader to do so. The records appear to show that Cameron paid his full share of tax—£75,898 on taxable in-come of £200,307 in the most recent tax year.

But the document also generat-ed a new round of headlines over a £200,000 gift his mother on which  Cameron—legally—paid no tax. Cameron  said publish-ing his tax information had been “unprecedented.” He said others who aspired to be prime minister or control the country’s finances should follow suit. But he said extending compulsory tax dis-closure to all lawmakers would be “a very big step,” and one he did not recommend.

Treasury chief George Osborne and opposition leader Jeremy Corbyn both published details of their own tax returns on Mon-day. So did London Mayor Boris Johnson, revealed to have paid almost £1 million in tax over the last four years.

The tax spat could have re-percussions for Britain’s June 23 referendum on European Union membership. Cameron is the lead-ing proponent staying in the EU, and anything that tarnishes his brand could undermine that cam-paign. In Britain the Panama Pa-pers sparked a furor shot through with the national obsessions of privilege and class.

L a b o u r l e a d e r C o r b y n said Cameron did not “fully ap-preciate the anger that is out there” about tax evasion. But Con-servative lawmaker Alan Duncan accused the prime minister’s crit-ics of hating “anyone who’s even got a hint of wealth in their life.”

Vetera n L abour l aw ma ker Dennis Skinner called Cameron a divisive leader, referring to him as “dodgy Dave.”

That was an adjective too far for Commons Speaker John Ber-cow, who asked Skinner to with-draw the insult or be ejected from the chamber. “I still refer to him as dodgy Dave. Do what you like,” Skinner said, before leaving to calls of “bye, bye” from Conser-vative lawmakers. AP

N EW YORK—The wealthi-est Americans can expect to live at least a decade

longer than the poorest—and that gap, as with income inequality, is growing ever wider.

New research in the Journal of the American Medical Association(Jama) shows top-earning Ameri-cans gained two to three years of life expectancy between 2001 and 2014, while those at the bottom gained little or nothing.

Plenty of research has already shown that health and wealth are intertwined, and that they gen-erally improve in tandem as you move up the income scale. But this year, wildly divergent incomes among Americans and the vanish-ing middle class have been central issues in a vitriolic race for the White House. The Jama research shows in the starkest terms yet how disparities in wealth are mir-rored by life expectancy, and how both are getting worse. Research last year showed that mortality rates are rising among middle-aged whites, largely due to sui-cide, drug overdoses and alcohol.

That work, by Princeton Uni-versity economists Anne Case and Nobel Prize winner Angus

De aton , re f le c te d e conom ic stresses on working-class whites that have, in, turn fueled the as-cendancy of Republican Donald Trump and his populist message.

The latest paper reinforces the idea that inequality in the US—the issue that’s also driven Sen. Bernie Sanders’s campaign on the Demo-cratic side—has consequences be-yond wealth and income.

Take a 40-year-old man in the top 1 percent. He can expect to live, on average, to 87. His counterpart in the bottom 1 percent would be expected to perish, on average, be-fore his 73rd birthday. For women, who live longer on average, the gap was narrower, but still substantial. Life expectancy for the richest women is almost 89, about 10 years longer than the poorest.

The authors—economists from Stanford University, the Massa-chusetts Institute of Technology, Harvard University, consulting firm McKinsey and Co., and the US Treasury’s office of tax analysis—used anonymous Internal Revenue Service data from 1.4 billion tax records over 15 years and matched them to death records from the Social Security Administration.

The change between 2001 and

2014 shows that the wealthy are benefiting more from gains in longevity than the destitute. Men among the top 5 percent of earn-ers gained more than two years and women gained almost three. In the bottom 5 percent, life ex-pectancy for men only increased by a few months, and for women, hardly at all.

When the researchers looked at how life expectancy changed by geography, there were some bright spots. Among the bottom 25 per-cent of incomes some regions had longevity gains of more than four years, while others lost more than two years. The differences “sug-gest that the increasing inequal-ity in health outcomes in the US as a whole is not immutable,” the authors write. The shortest life expectancy in the poorest quar-tile was in Oklahoma and rust belt cities like Gary, Indiana and Toledo, Ohio.

The longest was in cities like New York and San Francisco, “with highly educated populations, high incomes and high levels of government ex-penditures.”

The geographic differences in life expectancy for low-income people weren’t strongly explained

by access to health care, unemploy-ment rates, or housing segrega-tion, the authors write. Instead, lifestyle and behavior were at work: smoking, obesity and ex-ercise. “Individuals in the lowest income quartile have more health-ful behaviors and live longer in ar-eas with more immigrants, higher home prices, and more college graduates,” the researchers found.

It’s important to note that the relationship between income and life expectancy is complicated. An analysis like this can show as-sociations, but it can’t prove that one factor, like living in a highly educated city, caused people to live longer. “Income is correlated with other attributes that di-rectly affect health,” the authors write, and those attributes aren’t measured in the analysis. Mea-suring life expectancy at age 40, as this study does, also doesn’t capture important measures of health like infant mortality.

Angus Deaton, in a commentary accompanying the Jama research, wrote that “the infamous 1 percent” get an extra 10 to 15 years “to en-joy their richly funded lives and to spend time with their children and grandchildren, and they are pulling

UK’s Cameron defends financial arrangements

Wealthiest 1 percent of Americans live a decade longer

A WOMAN holds a baby in the center for refugees in Sid, about 100 kilometers west from Belgrade, Serbia, on April 8. Migrants are stuck on the Serbian side of the frontier since early March, when Balkan countries abruptly shut their borders to migrants wanting to reach Germany and other seemingly wealthy Western European countries. AP/DARKO VOJINOVIC

400Number of firms surveyed

by National Australia Bank Ltd.

Number of members of an extremist cell

10

The WorldBusinessMirror news@businessmirror.com.phWednesday, April 13, 2016A8

From Belgium’s Molenbeek to Sweden’s Malmo, new names are added nearly daily to the list of hardened attackers, hangers-on, and tacit supporters of the cell that killed 130 people in Paris and 32 in Brussels.

A computer abandoned by one of the Brussels suicide bombers in a trash can contained not only his will, but is beginning to give up other information as well, includ-ing an audio �le indicating the cell was getting its orders directly from a French-speaking extremist in Syria, according to a police o�-

cial with knowledge of the inves-tigation. The official spoke on condition of anonymity because he wasn’t authorized to speak publicly about the investigation.

Ten men are known to be directly involved in the No-vember 13 attacks in Paris; others with key logistical roles then—including the bomber, a logistics handler, and a hideout scout—went on to plot the at-tack March 22 in Brussels. But unlike Paris, at least two people who survived the attack have been taken into custody alive, in-

cluding Mohamed Abrini, the Mo-lenbeek native who walked away from the Brussels international airport after his explosives failed to detonate.

But investigators fear it may not be enough to stave o� anoth-er attack. Abdelhamid Abaaoud, another Molenbeek native whose charisma made him a natural draw to many in the Brussels neighborhood after he joined IS extremists in  Syria, said before his death that he returned to Eu-rope among a group of 90 �ght-ers from Europe and the Mideast, according to testimony from a woman who tipped police to his location. Patrick Skinner, a for-mer Central Intelligence Agency (CIA) case o�cer who is now with the Soufan Group security consul-tancy, described the Brussels-Paris network as a “supercell.”

“�e hope was that they had died out in the Paris attacks, and obviously that’s not true,” Skinner said in an earlier interview with �e Associated Press. “�ey [authori-ties] knew who these people were. And they still managed to pull o� the �rst Paris attack, which was the worst attack in France since World War II [WWII], and then under incredible scrutiny, they still pulled o� the worst attack in

Belgium since WWII. So this is a highly functioning cell.”

Normally, Skinner said, an ex-tremist cell has six to 10 people linked by pre-existing ties.

“It makes it very di�cult to crack. You’re not sending an infor-mant into this group, because they know each other. So no one new is just walking into this,” he said. “It’s so big, look at the people on the pe-riphery, logistics, the people that are suspected. You’re looking at 50 people. �at’s not a cell; that’s a ter-rorist group.”

It was a group already intimate-ly familiar with European law enforcement. Abrini was a petty criminal long before his younger brother was killed in  Syria  in 2014. Both Abdeslam brothers had brushes with the law, and Brahim spent time in prison for stealing Belgian ID cards—back-ground that took on new impor-tance amid revelations that many people in the IS cell had forged passports. And Abaaoud’s female cousin, Hasna Ait Boulhacen, who died with him on November 18 af-ter �nding a hideout for him, was under surveillance in a narcotics operation at the time, although her ties to the man already wanted on terrorism o�enses were unknown to French investigators.

�e man arrested for renting that �y-by-night �at in Saint De-nis, Jawad Bendaoud, had been sentenced to eight years in prison for the accidental killing of a man he described as his “best friend” over a cellphone.

The Belgian brothers who blew themselves up on March 22 had ties to violent crime, as did two suspects with ties to Sweden, one dead and one cap-tured this weekend.

The latest name to emerge, Osama Krayem, was a delin-quent in Malmo, Sweden, before leaving for Syria. Krayem “was the perfect target for radical-ization—no job, no future, no money,” said Muhammad Khor-shid, who runs a program in the neighborhood of Rosengard to help immigrants integrate into Swedish society. It’s a neighbor-hood with its own parallels to Molenbeek, and has proven to be fertile recruiting ground for Muslim extremists.

Krayem, who like Abrini is sus-pected of accompanying a suicide attacker on March 22, was detained on Friday. He traveled with Salah Abdeslam through Ulm, Germany, on one of Abdeslam’s many jour-neys putting extremists into place for attacks, authorities said.

Stephane Berthomet, a former French counterterrorism o�cer who now works as a writer and se-curity consultant in Canada, said the arrest of multiple key suspects would prove crucial.

“When there are declarations made by an accomplice, you can confront them and make progress in the discussions with the other suspects,” he said in an interview just ahead of the news of Abrini’s arrest on Friday. �e hope, of course, is that anything the sus-pects say will crack open a network that seems to grow by the day.

“�ere is not a single person at large—there are dozens of people at large. �at’s the reality,” Ber-thomet said. “�e reality is that we are dealing with groups that are badly identi�ed, whose organi-zation and evolution we have not analyzed because we focused on re-pression for years. Information was collected voraciously, but without real analysis.” AP

Network of Paris-Brussels attackersexposes a ‘supercell’ of extremism

PARIS—�e number of people linked to the Islamic State (IS) network that attacked Paris

and Brussels reaches easily into the dozens, with a series of new arrests over the weekend that confirmed the cell’s toxic reach and ability to move around unnoticed in Europe’s criminal underworld.

POLICE investigate an area where terror suspect Mohamed Abrini was arrested in Brussels on April 8. AP/GEERT VANDEN WIJNGAERT

CAIRO—Egypt’s declared inten-tion to hand over control of two strategic Red Sea islands to Saudi

Arabia has kicked o� a storm of vocifer-ous opposition, laced with stinging sat-ire, and dealt a blow to the pride of many Egyptians at a time when they feel their country is vulnerable and under attack from all sides.

The announcement that a team of Egyptian experts has concluded that the islands of Tiran and Sana�r at the mouth of the Gulf of Aqaba were inside Saudi territorial waters has taken Egyptians by surprise, raising criticism by some that the move amounted to a territorial sell-o� to the oil-rich Saudis at a time when Egypt’s battered economy needs all the help it can get.

Others charged that President Abdel-Fattah el-Sissi was running the country without transparency or accountability.

The agreement must be rati�ed by parliament, a 596-seat chamber packed with the president’s supporters whose adulation for Saudi Arabia went on dis-play on Sunday when King Salman ad-dressed the legislature. He was received with a standing ovation and his six-min-

ute address was repeatedly interrupted by applause. Lawmakers also recited po-etry praising the Saudi monarch.

“The government surprised 90 mil-lion Egyptians with a decision that we grew up accustomed to its opposite. That’s what made it worrisome and hor-rifying,” author and analyst Ibrahim Eissa said on his TV show about the declara-tion that the islands were Saudi.

Tiran is the larger of the two islands and is closer to Egypt’s southern Sinai coast.

It is associated in the mind of many Egyptians with their country’s four wars against Israel between 1948 and 1973, a time of nationalistic fervor and patrio-tism. More recently, Tiran has become a popular destination for tourists.

Hardly anyone in Egypt had thought of Tiran, the better known of the two islands, as anything but Egyptian ter-ritory for generations. But the gov-ernment now says that Saudi Arabia in 1950 merely placed the islands in Egypt’s custody to defend them against possible attack by Israel. Now, according to that narrative, Riyadh is able to defend the island and is simply

taking its own territory back.News of the expected loss of the

islands broke at a particularly vulner-able time, as the country is reeling from a string of public blunders and a host of seemingly intractable problems. Egypt’s economy is ailing after �ve years of turmoil, an insurgency by  Is-lamic militants has proved resilient and the vital tourism industry has been battered. The crash last October over the Sinai Peninsula of a Russian airliner, killing all 224 people on board, in a suspected terror attack has cut o� the �ow of Russian tourists who normally frequent the Red Sea resort of Sharm el-Sheikh. Mostly desert Egypt is also gripped by fear over the likely reduc-tion of its vital share of the Nile waters as a result of the construction by Ethiopia of a large dam on the river.

More recently, the country’s image abroad has taken a beating over the case of an Italian doctoral student whose torture and killing drew at-tention to the widespread culture of abuse of Egypt’s police.

Giulio Regeni’s body, bearing torture marks, was found on a suburban Cairo

road on February 3, nine days after he disappeared. Italian media and Regeni’s family have cast suspicion on the Egyp-tian police, but the Interior Ministry has consistently denied involvement.

Italy recalled its ambassador in Egypt on Friday to protest what it said was Cairo’s lack of cooperation in the Regeni investigation.

Khaled Ali, a prominent rights lawyer and a former presidential candidate, has �led a court case to demand that the Egyptian-Saudi agreement on the is-lands be annulled on the grounds that it violated Egypt’s constitution.

Critics also took to social media networks to denounce the deal, creat-ing the hashtag “Awad Sold His Land,” an allusion to the villagers’ taunts in a popular 1960s radio play of a man who sold his plot of farmland—an act that in the past was equated with dishonor in rural Egypt.

“Here, here, Pasha, one island for a billion, a pyramid for two and I will throw two statues on top,” Egypt’s best known political satirist, self-exiled Bas-sem Youssef, tweeted, mimicking the shouts of Egyptian street hawkers selling

souvenirs to foreign tourists.Curiously, the pro-el-Sissi media has

gone to great lengths to prove, even jus-tify, Saudi Arabia’s claim to the islands.

In the same vein, a Foreign Ministry statement lauded the decision as the fruit of “more than six years of hard and long work.”

“Egypt has not surrendered a single square inch of its territory under any condition,” the top  state newspaper Al-Ahram said in its Monday editorial. “But it will be unreasonable to deny our brothers their right to holding on to their own territory when all documents prove their ownership.”

The two islands control entry to the Gulf of Aqaba and the ports of Eilat and Aqaba in Israel and Jordan, respectively. Tiran lies about six kilometers from Sharm el-Sheikh. Israel captured the islands in the 1967 Arab-Israeli war but returned them to Egypt after the two nations signed a peace treaty in 1979.

Under the terms of the treaty, Egypt cannot station military forces on the islands and is committed to ensuring free navigation in the area’s narrow shipping lanes. AP

Egypt’s surrender of islands to Saudi Arabia deepens woes

WASHINGTON—The White House sought on Monday to share the blame for the failed aftermath of

the 2011 intervention in Libya, arguing the US and its North Atlantic Treaty Organiza-tion (Nato) allies asked too few questions about what would follow after dictator Moammar Qadda� was toppled.

A day after President Barack Obama called that failure the worst mistake of his presidency, the White House said Obama believed more should have been done to �ll the power vacuum.

Although the US played a leading role in that e�ort, White House spokesman Josh Earnest said Obama’s regrets extend-ed to what “the United States and the rest of the members of our coalition didn’t do.”

“The president has tried to apply this lesson in considering the use of military and other circumstances,” Earnest said, “that asking the question about what situ-ation will prevail and what sort of commit-ments from the international community will be required after that military interven-tion has been ordered by the commander in chief.”

Obama, in an appearance on “Fox News Sunday,” said his biggest mistake was “probably failing to plan for the day after what I think was the right thing to do in intervening in Libya.”

The US in 2011 joined the air campaign in an attempt to prevent Qadda�’s forces from killing thousands of civilians amid an uprising against his government. Five years later, the country is in chaos, with a UN-brokered unity government trying to assert itself and an alarming presence of Islamic State �ghters and other extremists.

Obama has conceded that the inter-vention “didn’t work.”

Last month, in interviews published in The Atlantic magazine, Obama called out European countries close to  Lib-ya  that he said had been unwilling “to put any skin in the game” to ensure sta-bility after the intervention, referring to them as “free-riders.”

Earnest said on Monday that the inter-national community had failed to come up with a plan to compensate for the de-terioration in Libya’s governing structures following decades of dictatorship.

“The point that the president was mak-ing was not that any speci�c ally of the US had utterly failed to follow through on a speci�c commitment that they had made,” Earnest said. “But rather, that the US and our broader coalition had not succeeded in mobilizing the necessary resources to bring about the scenario that we would have eventually liked to see.” AP

White House seeks to share blame for failure in Libya

DAMASCUS,  Syria—Islamic State (IS) militants recaptured a vital border crossing in northern Syria

and shot down a government warplane in the country’s west on Monday as the UN’s special envoy urged the warring parties to respect a fragile cease-�re ahead of peace talks set to resume in Ge-neva this week.

UN Special Envoy Sta�an de Mistu-ra’s plea came amid stepped up �ghting around the northern city of Aleppo, Syr-ia’s  largest, and elsewhere in the coun-try’s northern and western provinces.

He spoke after meeting with Syrian Foreign Minister Walid al-Moallem in Da-mascus in preparation for the talks, set to begin on Wednesday in Geneva be-tween the government and an umbrella opposition coalition backed by the US, Saudi Arabia, and other Western powers.

Earlier on Monday, IS militants cap-tured the strategic town of al-Rai on Syr-ia’s  border with Turkey after intense �ghting, the Britain-based Syrian Obser-vatory for Human Rights said. The town serves as the IS group’s access point to supply lines and also sits along the road to the IS stronghold in Aleppo province.

The latest IS gains show the group is still capable of launching counterattacks as it comes under pressure on di�erent fronts in Iraq and Syria. IS has lost wide areas in Iraq and Syria recently, including the historic central town of Palmyra that was captured by Syrian government forces and their allies.

The extremists have also su�ered leadership setbacks as US drone strikes in Syria have killed several top IS and Nusra Front commanders and key �gures in re-cent weeks. AP

IS takes Syrian town from rebels

The World BusinessMirror news@businessmirror.com.ph • news@businessmirror.com.ph • news@businessmirror.com.ph Editor: Lyn ResurreccionWednesday, April 13, 2016A9

Votes in favor and against the impeachment of President Dilma Rousseff done by a congressional committee

38-27

GAUHATI, India—With the Duke and Duchess of Cambridge set to visit the world’s largest one-horn rhino

park in remote northeastern India, con-servationists hope the British royals can help raise global alarms about how black-market demand for rhino horns and other animal parts is fueling illegal poaching and pushing species to the brink.

But just days before their Tuesday arriv-al, park o�cials said yet another rhino had been poached, bringing the total number of rhinos killed in Kaziranga National Park this year to six.

Poachers shot the rhinoceros and, while it was still alive, sawed o� its horn before �eeing before dawn on Sunday, wildlife o�cial Subasis Das said. Once the dying animal was discovered, park o�cials rushed to try to save it but were unsuccess-ful, he said.

Prince William and his wife, Catherine planned a visit to Kaziranga speci�cally to focus global attention on conservation. The 480-square-kilometer grassland park is home to the world’s largest population of rare, one-horned rhinos, as well as other endangered species, including swamp deer and the Hoolock gibbon.

The park has overseen major conserva-tion success, with its rhino population in-creasing from just 75 in 1905 to 2,200 last year. Many give credit to Lady Mary Cur-zon, a British baroness who reportedly per-suaded her husband, Lord George Curzon, to take steps to protect the rhino when he was governor general and viceroy of India from 1899 to 1905, when it was still part of the British Empire.

“The Royals should focus on global awareness and the success of Kaziranga, a conservation story started by Lady Cur-zon,” said industrialist Ranjit Borthakur, who heads the Balipara Foundation con-servation group in the state of Assam.

But as the neighboring human settle-ments continue to expand, the animals �nd themselves in increasingly tense com-petition for habitat.

All �ve of the world’s rhino species are under constant threat from poachers seek-ing their horns to sell on the black market.

Demand is high in countries, such as China and Vietnam, where people mistakenly believe consuming rhino horns can in-crease male potency. It does not.

Already six rhinos have been poached this year, after 20 were killed in 2015.

“The Duke will use this visit to speak out against the lies and violence that threaten this valuable species and the communities that rely on it,” Buckingham Palace said in a statement. “Tra�ckers in Southeast Asia are now marketing Indian rhino horn as ‘�re horn’ and lying about its increased potency when compared to African horn.”

Conservationists say the royal visit couldn’t be coming soon enough.

“The British royals’ visit will certainly in-crease the level of awareness on rhino con-servation,” said Bibhab Kumar Talukdar, who heads the local wildlife-protection group Aaranyak.

He wants the royals to press China and other countries to curb consumption of rare animal parts, including rhino horns as well as tiger bones and pangolin scales.

“We would expect the Duke and the Duchess to convince them to clamp down on such use,” Talukdar said.

The royals are expected to arrive on Tuesday evening in the garrison town of Tezpur, in the northeast Indian state of Assam. From there they will travel to an exclusive, 12-cottage jungle resort with thatch rooftops overlooking �elds and a river, according to local o�cials who spoke on customary condition of anonymity.

During a two-day stay, they will meet rangers and take a jeep safari through the park. They will also speak with Karbi tribal villagers who live in a nearby ham-let—a meeting that is expected to boost morale among locals trying to protect the area’s wildlife.

“The royals’ visit will bring Kaziranga further into the limelight. The villagers around the park will get added encourage-ment to work harder,” said Anowaruddin Choudhury of the Rhino Foundation for Nature in Northeast India.

After visiting the park, the couple will �y to the neighboring kingdom of Bhutan on Thursday morning. AP

As British royals head to wildlife park in India, rhino killed

BRITAIN’S Prince William (left) and his wife Kate, the Duchess of Cambridge, are greeted by Indian Prime Minister Narendra Modi, as they arrive for a lunch with him in New Delhi, India, on Tuesday. The Duke and Duchess of Cambridge are on a weeklong visit to India, their �rst royal tour in two years. AP/SAURABH DAS

With a tally of 38 in favor and 27 against, a special lower house committee on Monday night rec-ommended the impeachment to proceed on allegations that Rous-se� bypassed Congress to illegally �nance a budget de�cit.

�e margin was wider than orig-inally forecast, and sets the stage for a showdown when lawmakers vote on the �oor of the lower house as early as Sunday, said political an-alyst Andre Cesar, founder of con-sulting company Hold Assessoria Legislativa in Brasilia who has fol-lowed Brazil’s Congress for 20 years.

“�e result is still open, but the opposition is gaining ground,” Ce-sar said. “�ere is a strong antigov-ernment sentiment.”

An exchange-traded fund of Brazilian stocks rose 3.3 percent in Tokyo following the committee decision, on investor optimism a new government will be better equipped to revive the lagging economy. �e real closed before the vote, advancing the most among major currencies amid ex-

pectations the outcome would fa-vor impeachment.

Despite the growing support for Rousse�’s ouster, the opposi-tion still lacks the two-thirds ma-jority needed for impeachment to pass in the lower house and advance to the Senate, according to some surveys.

Several centrist legislators re-main undecided whether to support Rousse� or side with Vice President Michel Temer, who would replace her and whose party abandoned the ruling alliance last month.

�e antigovernment organiza-tion VemPraRua, “To the Street,” said as of Monday afternoon there were 291 votes for and 128 against impeachment in the lower house. A group of Rousse� allies, in-cluding members of her Workers’ Party, said there were 126 votes against the president’s ouster. A survey by Estado de S. Paulo news-paper showed 298 legislators in fa-vor of impeachment, an increase of 64 votes since April 5.

According to one senior law-maker who spoke on the condition of anonymity, the vote could be de-cided by a margin of 30 votes.

Temer’s speechIN one of several surprising twists that have marked a political crisis pushing Brazil deeper into reces-sion, a recording on Monday leaked of Temer addressing the outlines of an administration under his lead-ership. Opposition legislators said the tape was evidence that Te-mer was conspiring to overthrow Rousse� and undermined the im-peachment process.

Other potential pitfalls to a lower house vote on Sunday include government plans to challenge the impeachment process before the Supreme Court, citing among other concerns insu�cient legal grounds for her removal from o�ce.

Rousse�, 68, who was impris-oned and tortured during Brazil’s two-decade military dictatorship that ended in 1985, has repeat-edly denied wrongdoing and said that the push to oust her without su�cient evidence would amount to a coup.

Even if Rousse� were to survive impeachment, she still faces the risk of a prolonged power struggle during the remainder of her term through December 2018. Lower House Chief Eduardo Cunha said last week that he could admit nine other requests for Rousse�’s ouster. Also, the electoral court is still ana-lyzing whether to annul her 2014 reelection on allegations it was �-nanced with graft money, charges the administration denies.

BuildupMEANWHILE, authorities in the capital, Brasilia, have been bracing for mass demonstrations in com-ing days, erecting metal barriers in the city’s main avenue to separate opposing factions. Residents of São Paulo could be heard banging pots and pans, as well as honking their car horns immediately after Mon-day’s committee vote.

As of Monday afternoon, 184,000 people throughout Brazil signed up on VemPraRua’s Facebook page to demonstrate on Sunday in favor of Rousse�’s ouster. �e �gure is similar to the number of people who signed up for demonstrations a week be-fore the March 13 protests, which ultimately attracted over 3 million people nationwide.

Government supporters gath-ered in Rio de Janeiro on Monday evening to pressure legislators to stop impeachment.  Rousse�’s pre-decessor and mentor, Luiz Inacio Lula da Silva, addressed the crowd, comparing e�orts to remove the president from o�ce to the 1964 coup that led to a military dictator-ship. Bloomberg News

Brazil’s lawmakers push for Rousseff’s impeachmentBRAZILIAN lawmakers

pushed President Dilma Rousseff a step closer to

impeachment, after a committee in the lower house voted for her ouster in the first formal test of sentiment in Congress.

TOKYO—To dump or not to dump a little-discussed substance is the question brewing in Japan as it

grapples with the aftermath of the nuclear catastrophe in Fukushima �ve years ago. The substance is tritium.

The radioactive material is technically near-impossible to remove from the huge quantities of water used to cool melted-down reactors at the Fukushima Dai-ichi plant, which was wrecked by the massive tsunami in northeastern Japan in March 2011.

The water is still accumulating: 300 tons are still needed a day to keep the reac-tors chilled. Some is leaking into the ocean.

Huge tanks lined up around the plant, at last count 1,000 of them, each hold hundreds of tons of water that have been cleansed of radioactive cesium and stron-tium but not of tritium.

Ridding water of tritium has been car-ried out in laboratories. But it’s an e�ort that would be extremely costly at the scale required for the Fukushima plant, which sits on the Paci�c coast. Many scientists argue it isn’t worth it and say the risks of dumping the tritium-laced water into the sea are minimal.

Their calls to simply release the water into the Paci�c Ocean are alarming many in Japan and elsewhere.

Rosa Yang, a nuclear expert at the Electric Power Research Institute, based in Palo Alto, California, who advises Japan on decommissioning reactors, believes the public angst is uncalled for. She says a Jap-anese government o�cial should simply get up in public and drink water from one of the tanks to convince people it’s safe.

But the line between safe and unsafe radiation is murky, and children are more susceptible to radiation-linked illness. Tri-tium goes directly into soft tissues and organs of the human body, potentially increasing the risks of cancer and other sicknesses. “Any exposure to tritium ra-diation could pose some health risk. This risk increases with prolonged exposure, and health risks include increased occur-rence of cancer,” said Robert Daguillard, a spokesman for the US Environmental Pro-tection Agency.

The agency is trying to minimize the tritium from US nuclear facilities that es-capes into drinking water.

Right after the March 2011 disaster, many in Japan panicked, some even mov-ing overseas although they lived hundreds of kilometers away from the Fukushima no-go zone.

By now, concern has settled to the ex-tent that some worry the lessons from the disaster are being forgotten.

Tritium may be the least of Japan’s wor-ries. Much hazardous work remains to keep the plant stabilized, and new tech-nology is needed for decommissioning the plant’s reactors and containing mas-sive radioactive contamination.

The ranks of Japan’s antinuclear activ-ists have been growing since the March 2011 accident, and many oppose releasing water with tritium into the sea. They argue that even if tritium’s radiation is weaker than strontium or cesium, it should be re-moved, and that good methods should be devised to do that.

Japan’s �sheries organization has re-peatedly expressed concerns over the is-sue. News of a release of the water could devastate local �sheries just as communi-ties in northeastern Japan struggle to re-cover from the 2011 disasters.

An isotope of hydrogen, or radioactive hydrogen, tritium exists in water form, and so like water can evaporate, although it is not known how much tritium escaped into the atmosphere from Fukushima as gas from explosions.

The amount of tritium in the contami-nated water stored at Fukushima Dai-ichi is estimated at 3.4 peta becquerels, or 34 with a mind-boggling 14 zeros after it.

But theoretically collected in one place, it would amount to just 57 milliliters, or about the amount of liquid in a couple of espresso cups—a minuscule quantity in the overall masses of water.

To illustrate that point, Shunichi Tana-ka, chairman of the Nuclear Regulation Authority, showed reporters a small bottle half-�lled with blue water that was the equivalent of 57 milliliters.

Public distrust is running so high after the Fukushima accident that Tokyo Elec-tric Power Co., the utility that operates the Fukushima plant and oversees its decom-missioning, has mostly kept quiet about the tritium, pending a political decision on releasing the water. AP

JAPAN PREPARES TO RELEASE TRITIUM FROM FUKUSHIMA PLANT

PANAMA CITY—Panamanian pros-ecutors visited the o�ces of the Mossack Fonseca law �rm on

Monday to look into its allegations that a computer hacker was behind the leak of a trove of �nancial documents about tax havens the �rm set up to bene�t in�uen-tial people around the globe.

Public ministry spokesman Sandra

Sotillo said the visit to the of�ces of Mossack Fonseca was made by investigators from the intellectual property prosecutor’s office.

The �rm �led a complaint charging the security breach shortly before media reports appeared last week using the documents to detail how politicians, ce-lebrities and companies around the globe were hiding assets in o�shore bank ac-

counts and anonymous shell companies.“Finally, the real criminals are being in-

vestigated,” �rm cofounder Ramon Fonseca said in a message to The Associated Press.

Fonseca has maintained that the only crime which can be taken from the leak was the computer hack itself. He has said he suspects the hack originated outside Panama, possibly in Europe, but

has not given any details.Panama’s government has said it will

cooperate with any judicial investigation arising from the documents.

Some critics of the government have called for a rapid investigation of the law �rm, which is one of the most important in the world for creating overseas front companies. AP

Investigators visit Panama Papers law firm’s office

Wednesday, April 13, 2016 •Editor: Angel R. Calso

OpinionBusinessMirrorA10

Let’s strengthen our China policy

editorial

NEWS reports coming from Southeast Asian nations in recent days validate the soundness of our policy toward China. The first report states that Vietnam seized a Chinese vessel for intrud-

ing into its waters. The second relates that Indonesia chas-tised China for trying to ram an Indonesian vessel towing a Chinese boat caught violating Indonesian maritime sov-ereignty. And the third says that Singapore called on China to align its security measures with the economic policies it adopts in its foreign relations.

There is a fourth report, this one pertaining to a United Nations commis-sion that expanded Argentina’s maritime territory in the south Atlantic ocean to include the disputed British-occupied Falkland islands.

China is engaged in a massive aggressive bullying over Southeast Asia. Our neighbors are actively resisting it. We, who have been bullied the most severely, can do no less. Our resort to international arbitration is correct and proper. The UN commission report saying that booties of imperialism are not beyond the reach of international law also favors us. But this nonconfrontational ap-proach to the issues is not enough.

True to the dialectical logic that guides the thinking of most communist parties, China has turned into its opposite. A bosom friend of small developing countries under Chairman Mao, China has turned into their most vicious enemy.

Under these circumstances, we have no recourse except to steel our resolve to resist Chinese bullying. We are not a small country. Population-wise, we are individually bigger than France, Germany, the United Kingdom and other West European countries. Moreover, the idea that small nations can never defeat big ones is wrong. Lilliputian Finland held the Soviet bear to a draw in the 1940s. In the first years of World War II, Japan with its 40 million people conquered and overran China with its 700 million people. Concerning the 1979 Chinese invasion of Vietnam, the opinion of international military observers is that the numerically puny Vietnamese People’s Army outperformed the numeri-cally overwhelming Chinese People’s Liberation Army.

Instead of freezing in indecisiveness, let us strengthen our Armed Forces and enter into alliances with friendly countries for mutual defense. The re-vival of joint military exercises with the United States and the signing of a cooperative agreement with Japan are steps in the right direction. There is a saying that you cannot win on the negotiating table what you have not won on the battlefield.

Our own Gen. Victor Corpuz, a personality of somewhat ambiguous politi-cal inclination but of unquestioned loyalty to his country, once wrote a paper on how a small country can defeat a big country in war. It’s time we retrieved this paper from the archives, debated it and benefited from its insights.

We value our friendship with China and we hope that the next administra-tion will find a way to restore this friendship. But it takes two to tango. For the moment we need to strengthen our national defense, to spank the bully in the neighborhood.

I RECENTLY received a complaint from a Social Security System (SSS) member about the failure of his employer to submit the corresponding report of his salary loan payments so that as far

as SSS was concerned, no payments had been made as they were not posted into his account. The member, therefore, was not qualified to renew his loan.

The legal obligations of an employer

Clearly, in this case, the employer is at fault for not submitting the obligatory report of loan payments. Thus, I thought it timely to remind employers through this column about their obligations under the Social Security Law.

The employer is obliged under the SS Law to register as an employer by accomplishing the Employer Reg-istration Form (R-1) and to report all his employees to the SSS for coverage using the Employment Report Form (R-1A). These forms must be submitted together at the nearest SSS branch. The effectivity of the employer’s compulsory cover-age with the SSS starts on the first day he hires his first employees. The

employer is given 30 days from date of hiring, to report an employee for coverage to the SSS.

The employer is, likewise, obliged to deduct contributions from his employees, pay his share of contri-butions including Employees’ Com-pensation, and remit these to the SSS within the prescribed schedule of payments.

The employer shall then submit to the nearest SSS branch the monthly report of his employees’ contribu-tions using the Contribution Col-lection List (Form R-3) in electronic media together with the validated Employer Contribution Payment Return (Form R-5) or the Special Bank Receipt (SBR) and the Form R-5

on or before the 10th day after the payment due date. If the employer is registered at the My.SSS online facil-ity, he can submit the Contribution Collection List online.

Another obligation of an employer is to deduct from his employees’ sala-ries the monthly loan amortizations based on the scheduled payment deadlines for SSS member loans and remit the same to the nearest SSS branch with tellering facility, or through accredited banks using the Member Loan Payment Return Form (Form ML-1) on the scheduled pay-ment date. The employer is, likewise, required to submit a monthly report of his employees’ loan amortizations through an accomplished Mem-ber Loan Billing Statement (Form ML-2) in electronic media together

with the validated monthly Mem-ber Loan Payment Return Form or the SBR and Form ML-1. The Mem-ber Loan Billing Statement (Form ML-2) may also be submitted online if the employer is registered in the My.SSS facility.

As part of his legal obligation, the employer is required to maintain true and accurate work records of his em-ployees, which include monthly con-tributions and loan amortizations, if any, and record of sickness, injuries, death of employees in manual or elec-tronic logbook for work-connected accident. Such records shall be open for inspection by the SSS or its au-thorized representatives quarterly or as often as the SSS may require.

Under the law, violations or non-compliance of the legal obligations of the employer may be penalized as provided under Section 28 of Repub-lic Act 8282, or the Social Security Act of 1997.

For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55, which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays.

Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send com-ments about this column to susiebugante.bmir-ror@gmail.com.

HOM

BusinessMirror A broader look at today’s business

Publisher

Editor in Chief

Managing EditorAssociate Editor

News EditorCity & Assignments Editor

Senior Editors

Online EditorSocial Media Editor

Creative DirectorChief Photographer

Chairman of the Board & OmbudsmanPresident

VP-FinanceVP-Corporate AffairsVP Advertising Sales

Advertising Sales ManagerGroup Circulation Manager

T. Anthony C. Cabangon

Jun B. Vallecera

Max V. de LeonJennifer A. NgDionisio L. PelayoVittorio V. Vitug

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Ruben M. Cruz Jr.Angel R. Calso

Eduardo A. DavadNonilon G. Reyes

Judge Pedro T. Santiago (Ret.)Benjamin V. RamosAdebelo D. GasminFrederick M. AlegreMarvin Nisperos EstigoyAldwin Maralit TolosaDante S. Castro

BusinessMirror is published daily by the Philippine Business Daily MirrorPublishing, Inc., with offices on the 3rd floor of Dominga Building III

2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

REGIONAL OFFICES

Printed by BROWN MADONNA Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila

Ambassador Antonio L. Cabangon ChuaFounder

nDXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997

nDYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994

nDWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,

Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001

nDXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996

nDXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante ClinicTiongson Street, General Santos City CONTACT NO.: 0922-811-3998

nDYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com

ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995

nDWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992

nDWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Since 2005

✝

All About Social SecuritySusie G. Bugante

Atty. Dennis B. Funa

INSURANCE FORUM

The EastWest Bank-Ageas Insurance joint venture

IN January 2016 the Insurance Commission issued a Certificate of Authority for the newly created EastWest Ageas Life Insurance Co. It is a joint venture between East West Banking Corp. (EW

Bank) and Ageas Insurance International NV (Ageas), wherein each would have a 50-50 equity stake (it is actually 50 percent plus one share for Ageas and 50 percent minus one share for East West Bank).

It is capitalized at P2.01 billion ($41.08 million), double the require-ment under the Amended Insurance Code. Moreover, EW Bank and East-West Ageas Life have entered into a 20-year exclusive bancassurance distribution agreement. The first CEO of EW Ageas Life will be Hans Loozekoot. The investment sig-nals the continuing confidence of foreign investors in the Philippine insurance market.

EW Bank is a universal bank and in 2015 has the seventh-largest ban-cassurance distribution network with about 433 branches nationwide.

It is among the top 10 local banks in the country. It is a subsidiary of Filinvest Development Corp. (FDC) with 75-percent equity holding, as of end of 2014. FDC was established in 1955 by Andrew Gotianun. EW Bank was created on July 6, 1994. In May 2012 it became a publicly listed bank through an initial public offer-ing. This is EW Bank’s first venture into the life-insurance business. For the year 2015, EW Bank earned P2 billion in net income, which is lower by 3 percent than 2014’s P2.073 bil-lion. Its total assets for 2015 stood at P232.9 billion, 24 percent higher

than that of 2014. Its current presi-dent is Antonio C. Moncupa Jr.

Ageas SA/NV is among the top 20 insurance companies in Europe. It is Belgium’s largest insurer with headquarters in Brussels. It oper-ates in 14 other countries in Asia, which includes Malaysia, China, In-dia, Thailand and Vietnam. While it is entering the Philippine market, Ageas sold its life-insurance business in Hong Kong to JD Capital (Bei-jing Tongchuangjiuding Investment

Management Co.) for HK$10,688 million or €1,230 million. With a mature domestic insurance market, Belgian insurance companies are seeking to expand overseas.

Ageas was formerly known as Fortis Holding, a Dutch-Belgian fi-nancial services group, but was re-named in April 2010. Ageas traces its roots to Assurances Generales (AG), founded in 1824. In 1990 AG was renamed Fortis. In April 2010 it was renamed to Ageas SA/NV but the Fortis brand name was passed on to BNP Paribas.

Since it will be operating from scratch, its information-technology platform will be hosted by SAP Hana Enterprise Cloud with data centers in Singapore and a disaster-recovery server in SAP Hong Kong. Its systems will include policy administration, quotation, underwriting, claims, commissions and others. Advice on the joint venture and the bancas-surance agreement were given by London law firm Clifford Chance.

Atty. Dennis B. Funa is currently the deputy insurance commissioner for legal services of the Insurance Commission.

E-mail address: dennisfuna@yahoo.com.

Ageas SA/NV is among the top 20 insurance companies in Europe. It is Belgium’s largest insurer with headquarters in Brussels. It operates in 14 other countries in Asia, which includes Malaysia, China, India, Thailand and Vietnam. While it is entering the Philippine market, Ageas sold its life insurance business in Hong Kong to JD Capital. With a mature domestic insurance market, Belgian insurance companies are seeking to expand overseas.

The employer is obliged under the SS Law to register as an employer by accomplishing the Employer Registration Form (R-1) and to report all his employees to the SSS for coverage using the Employment Report Form (R-1A). These forms must be submitted together at the nearest SSS branch.

Wednesday, April 13, 2016

OpinionA11BusinessMirroropinion@businessmirror.com.ph

B M G Bloomberg View

EUROPE is gearing up for a sum-mer of discontent. There’s the UK referendum on European

Union (EU) membership, a simmer-ing refugee crisis and an increasingly desperate European Central Bank (ECB). Taken together, this list gives reason enough to be fearful about the health of the European project in the coming months.

But there is also Greece, which is caught in a spat between Ger-many and the International Mon-etary Fund (IMF) over debt relief, as it seeks yet more bailout money. Greece—whose economic crisis al-ready threatened to destroy the ir-revocable nature of euro member-ship—still seems to be dragging its feet over state asset sales and pen-

sion reform. It is hemorrhaging cash from its banking system. Athens has to find more than €5 billion ($5.7 bil-lion) to meet its debts in June—and another 5 billion euros in July.

That’s €10-billion Greece doesn’t have; not, perhaps, a princely sum for a larger, healthier European state but that’s 20 percent of Greece’s annual tax income. Now, there’s an argu-ment that with so much else going on in the European theater, Brussels will be keen to fudge a solution just to get Greece off the agenda. The IMF may not be so willing to oblige, how-ever.  If May comes and goes without a deal—be it because of German in-transigence on debt relief, the IMF stubbornness on budget targets, or Greek brinksmanship—Greece and its creditors may run out of time to avoid default.

As Greece’s debt repayment dead-

lines approach, EU officials may be busy fighting fires kindled by Brit-ain’s June 23 referendum on EU membership. The outcome of that vote is far from certain. Bloomberg’s composite tracker of opinion polls puts votes to remain in the EU at 39 points, those wanting to leave at 38, with “don’t knows” holding the bal-ance of power at 23.

With Prime Minister David Cam-eron embroiled in a domestic row about his personal taxes in the wake of the so-called Panama Papers, gov-ernment popularity is likely to take a hit. That can only help the anti-EU campaign; it won’t take many unde-cided voters to swing the outcome.

The European Commission’s reg-ular survey of attitudes to the EU, known as the euro barometer, has already taken a turn for the worse, with the most recent poll showing

rising discontent:The proportion of Europeans for

whom the EU conjures up a negative image has risen to 23 percent (+4); before this, it had declined continu-

ously in the four previous surveys.Renewed concern about the Eu-

ropean project is just starting to surface in the bond market. Inves-tors are now charging Portugal 3.3 percentage points more for 10-year money than they demand from Ger-many, a spread that’s well above its six-month average of 2.2 points. It-aly’s risk premium rose to 1.3 points last week, up from December’s low of 0.9 points, while Spain is at 1.4 points, up from 1.2 points a month ago. That’s not enough to ring alarm bells; but it’s odd at a time when the ECB is increasing its sovereign bond purchases.

While last week’s Dutch rejection of a treaty between the EU and the Ukraine hinged on a very low turn-out about a very specific policy, it does hint at the disquiet rumbling through the EU. A British decision

to quit may prompt other countries to hold ballots on their own mem-bership (Marine Le Pen has already promised referendums as part of her campaign strategy for the 2017 French presidential elections).

So the timing could turn out to be disastrous. The IMF, which says Greece can’t turn itself around without debt relief, may be unable to reconcile its differences with Germany, which says further re-lief is irrelevant to a solution. The EU may find itself trying to hand money over to its weakest and most begrudging member just when one of Europe’s most important par-ticipants, if the Brexit vote goes against the government, has called it quits. Instead of hitting the beach this summer, Europe’s leaders may find themselves trying to stop their sandcastle from crumbling.

AT a book signing in Kamuning Bakery, which serves the best tapa rice on the planet, Senate President Ed Angara—yes, it is customary to keep your last official title; mine sadly is

Cong, so if I were anointed ruler I would have to add “King”; indeed, Ed Angara said that predicting drought is now a science. El Niño is predicted to happen every two years. Even the severity of this one was scientifically calculated beforehand.

Ten billion risks in Greece’s summer of discontent

The story of Joseph

ASIMPLE “rule of thumb” called the Okun’s law, named after 1960’s American economist Arthur Melvin Okun, may still be relevant today, despite becoming outdated the past few

decades with the changing components of the economy.

Our presidentiables must learn from ‘Okun’s law’

FREE FIRETeddy Locsin Jr.

quadrillion dollars, the small banks that lend directly to small business-es and  manufacturers, who create physical wealth and build the real economy, were  forced  into bank-ruptcy. From 2007 to 2012 alone, scores of small American banks closed shop. n ‘Simplicity’ way out of poverty? While Okun’s law may have diminished in importance, in an economy of bloating financial monetarism amid the slumping physical real economy, it still re-mains relevant. More so, because of its “simplicity” not only as a “forecasting tool,” but as a strate-gic guide of solving the No. 1 prob-lems that are foremost on surveys and on the minds of people—Jobs and Poverty. The battle cry walang mahirap, kung walang kurap (There will be no poverty, if there is no corruption) is sneered at by people, who still feel the pangs of hunger and poverty that are fueling discontent, criminality, unrest, Islamic extremism and left-ist insurgency in the countryside. Indeed, there is a direct correla-tion between social problems and poverty. And two-thirds of those below the poverty line are based in the agriculture and fisheries sector in the countryside. And to simply apply Okun’s law by whoever wins among the presi-dentiables, he or she must go for the logical strategy, which is invest where the bulk of the unemployed and two-thirds of those below the poverty line are based—in the agri-culture and fishery sector, or invest

in the very people who produce our food, but are ironically suffering from hunger and poverty. n Productive, not consump-tive, investments. Therefore, the focus must be on providing produc-tive jobs in areas and sectors where poverty is at its worst: fisherfolk, with the sector having the worst pov-erty incidence; and backward prov-inces, like Lanao Sur, where poverty is at 68.9 percent; Kalinga-Apayao, 59.8 percent; Eastern Samar, 59.4 percent; Maguindanao, 57.8 per-cent; Zambo del Norte, 50.3 percent, etc., which incidentally are the areas where insurgency abounds. Let’s not fall into the trap and mistake of hiring people for their consumptive needs similar to the classic Keynes-ian approach of employing workers to dig up ditches, then hiring another group to fill them up. This is similar to hiring street sweepers (Metro Aides) or elevator boys, or to a certain extent the condi-tional cash transfer, whereby benefi-ciaries get cash for their consumptive needs, unlike more productive jobs, which have higher multiplier effects and impact on the economy. Through productive jobs in the countryside, starting with massive rural infrastructure, like irrigation, transport systems, postharvest fa-cilities, credit and capacity-building through Koops, etc., we can easily realize Okun’s law in action. (See my past column on job generation, entitled “Presidentiables must learn from FDR and his story.”)

E-mail: mikealunan@yahoo.com.

ON THE CONTRARYMichael Makabenta Alunan

n Okun’s guide to high growth. Okun simplified the sta-tistical relationship between em-ployment and GDP with his popular ratio then, which states that for “ev-ery 1-percent decline in the unem-ployment rate, GDP increases by 3 percent. Conversely, he added that if the unemployment rate increases or worsens by 1 percent, GDP falls by 2 percent. For awhile, Okun’s observations were often proven true that his sta-tistical ratios were called “Okun’s law.” More so, when employment then was directly related to produc-tion-related activities in industry and agriculture.

This has all changed with mon-etary liberalism, starting with the liberalization of the American dol-lar from being pegged to gold in Au-gust 1971, called then as the “Nixon Shock,” followed by the scrapping of Franklin D. Roosevelt’s 1933 Glass-Steagall Act with the passage of the Gramm-Leach-Bliley Act in 1999 that deregulated the banking indus-try, allowing the unification of com-

mercial and investment banking. n When you can’t bank on banks. Thus, the too-big-to-fail Wall Street banks have abused this privi-lege and even sucked in government and workers’ pension plans, which were invested, or rather gambled on the lucrative, but highly volatile, hedge funds and derivatives market that have led to the frequent finan-cial bubbles of booms and busts, with the last one bursting during the 2008 global financial crisis. You can’t, therefore, bank on these banks for jobs and growth. As we see, robust financial growth, it is now often accompanied with slumps and stagnations in the real economy, thus the jobless non-inclusive growth resulting in wors-ening poverty that effectively defied the expectations of Okun’s law.

In the US, for instance, while the huge “too big to fail” Wall Street banks were bailed out from col-lapse owing to the bubble burst of the massive speculative casino gambling-like derivatives and hedge funds now estimated to be over two

And yet, the government did not forewarn the farmers. Nor did the government forearm the farmers against impending drought.

Drought has destroyed the sec-ond crop, not only in Kidapawan but in Iloilo, too, and most other farm-ing parts of the country. Therefore, there was no call, no call at all, to shoot the farmers. Given the gov-ernment’s failure, if the government had to shoot, it should have shot itself—or at least, Proceso Alcala. Indeed, way before weather sci-ence, God showed us, by historical example, what to do when famine is impending.

Joseph was taken out of prison, where he was flung upon suspicion of fooling around with the wife of the Pharaoh’s guard, Potiphar, a eu-nuch so he had more on his hands than he could do anything with…. Anyway, it was a false accusation, though Potiphar’s wife protested too much, if you ask me.

Anyway, Joseph was taken to Pharaoh, who had a disturbing dream, a dream no one in his cabi-net of classmates—I mean conjur-ers—could interpret. Pharaoh told Joseph, “I dreamed of seven kine, [the archaic plural of cows] that came out of the river, exceeding fat and beautiful. They were followed by seven kine that were lean and ugly and who ate the juicy ones”—as happens in life.

Pharaoh said further, “And I dreamed of seven fat ears of corn growing from the same stalk as seven ears of corn so lean that they overshadowed the beauty of the fat”—as often happens in life. As you can see, tastes have changed since fat was beautiful.

Pharaoh asked, “What doth they portend?” Joseph said, “that there will be seven years of plentiful har-vests followed by seven years of none, and famine shall follow”—as surely as his shadow follows a man. Nice touch, I added that.

But Joseph went beyond predic-tion to prescription. He added, “Let Pharaoh appoint a wise and indus-trious man, unlike unto Alcala, and make him ruler over the land so that he may appoint overseers, who shall gather into barns a fifth part of all the fruits in seven years of plenty. These fruits shall be held in readiness against the seven years of famine that shall oppress the land. In that way the land shall not be consumed with scarcity,” Joseph said. Nor the farmers fired upon, I might add.

To no one’s surprise, because Pharaoh was a good president, he appointed Joseph to be that wise and industrious man to rule sec-ond only to Pharaoh over all other officials of the land. Thus, Joseph became The Food Czar. “And so it came to pass, that Jo-seph laid up grain in the seven years of plenty, so that when the seven years of lean followed, Pharaoh said unto his people, “Don’t come to me, go rather to Joseph, and do all that he shall say to you.” Thereby doing what most leaders do not, give credit where it is due.

“The famine increased daily in all the land, and Joseph opened all the barns, and sold”—sold ha!—“to the Egyptians”; for it was assumed that the farmers saved up enough in the years of plenty to tide them over the years of want. But because our people never experienced years of plenty, even in a faux boom econ-omy, they could not save up for years of greater want. So the government should give them Center for Com-munity Transformation to buy rice, so the money goes back to the gov-ernment. If I were president, by the third day of the farmers’ protest, the highway in Kidapawan would be so jammed with the traffic of rice-bearing trucks that you could not see the road beneath. And I would say, even to my political enemies, come, help me, to distribute efficiently, rice to all our people; for I do not give a rat’s ass who you support, so long as we feed the hungry.

For only with a full stomach is dignity possible and not with make-work for free food, which is an insult to working men and a waste of time and resources. The rest is claptrap.

Drought has destroyed the second crop, not only in Kidapawan but in Iloilo too, and most other farming parts of the country. Therefore, there was no call, no call at all, to shoot the farmers. Given government’s failure, if government had to shoot it should have shot itself—or at least Proceso Alcala. Indeed, way before weather science, God showed us, by historical example, what to do when famine is impending.

That’s 10 billion euros Greece doesn’t have; not, perhaps, a princely sum for a larger, healthier European state but that’s 20 percent of Greece’s annual tax income. Now, there’s an argument that with so much else going on in the European theatre, Brussels will be keen to fudge a solution just to get Greece off the agenda. IMF may not be so willing to oblige, however.

B D C | @davecaga

IN response to the apparent need for casinos to be covered by antimoney- laundering laws, the Philippine

Amusement and Gaming Corp. (Pagcor) is amenable to privatizing its proprietary function of operating casinos.

The proposal to privatize Pag-cor is meant to prevent the “ab-surd” situation wherein Pagcor would have to report the transac-tions covered by the anti-money laundering law, but which trans-actions Pagcor itself executed as an operator of casinos.

That proposal had been pend-ing since the time of President Ar-royo, and had only come to the fore again in the heat of the Senate’s investigation into the $81-million cyber heist of the Bangladesh gov-ernment’s dollar account in New York, the proceeds of which found their way into the Philippines and ended up in the casinos here in Manila.

But Pagcor Chairman Cristino Naguiat said the proposed priva-tization should be done through legislation and not by mere ex-ecutive order, as he confirmed that there is a recommendation within the Office of the President to privatize Pagcor.

“It’s their call whether they want

to amend the law or not,” Naguiat told the BusinessMirror, refer-ring to the senators and congress-men who, he said, would have the discretion on whether to amend Pagcor’s legislative charter.

Policy considerationsPRESIDENTIAL Decree 1869, or Pagcor’s legislative franchise, al-lows Pagcor to operate its own ca-sinos and enter into joint-venture agreements for the operation of these casinos. This function is seen by senators and congressmen as being incon-gruent with the intent of the law to make Pagcor as the regulator of gambling in the country, with the ultimate mandate of using the gam-bling business as a tool for boosting tourism in the country. Pending bills in the Senate and the House feature various amend-ments to Pagcor’s charter, ranging from mandating Pagcor to only focus on regulating casinos to proposals to strip Pagcor of the

authority to license casino opera-tors altogether, and give that au-thority back to Congress.

During the continuing Senate hearings on money laundering, Sen. Aquilino Pimentel III pointed out that Pagcor’s operation of ca-sinos and the grant of licenses to private casinos result in the situa-tion wherein there is competition between Pagcor and its licensees for the same business.

It is also common knowledge that there is a proliferation of e-games outlets even in residential areas, defeating the intent of the law to minimize the adverse effects of gambling on the citizenry and capitalize instead on its potential to boost tourism.

In Republic Act 9487, or the law which extended Pagcor’s franchise for another 25 years in 2007, there is also an explicit prohibition by law that “the operation of slotmachines and other gambling paraphernalia and equipment, shall not be allowed in establish-ments open or accessible to the general public.”

The only exception to this prohibition is when such slot machines or other gambling para-phernalia or equipment are oper-ated within three-star hotels and resorts accredited by the Depart-ment of Tourism and authorized by the corporation and by the lo-cal government unit concerned, even as no exception is provided for the operation of these slot

machines in residential areas.

Privatization recommendedAS early as December last year, the Governance Commission on GOCCs (GCG) had already recom-mended to President Aquino the privatization of Pagcor’s proprie-tary function of operating casinos, and to focus instead on its function of regulating casinos so that the intent of the laws regarding gam-bling could be realized. The recommendation to priva-tize Pagcor was among the 14 recommendations to either close down, privatize or merge gov-ernment-owned and -controlled corporations (GOCCs) for various reasons, such as redundancy, inef-ficiency or nonprofitability. Naguiat confirmed that there is, indeed, a pending recommenda-tion at the Office of the President to privatize Pagcor, but he said that he believes that it is not within the GCG’s authority to effect the

privatization of Pagcor. T he GCG’s lega l basis for recommending the privatization of Pagcor through an executive order by the President is its own char-ter, which provides that it has theauthority, among others, to review the functions of each GOCC and recommend either privatization, abolition and mergers.

The GCG’s position is that Pagcor is covered under the su-pervision of the GCG because its charter had provided it with over-sight functions over all GOCCs and government financial insti-tutions, including subsidiaries, except the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts, economic zone authori-ties and research institutions.

“But that’s only their per-ception [that they can do that]. Anyway, any privatization would probably happen after my stint,” Naguiat said.

A12

2ndFront PageBusinessMirror

www.businessmirror.com.ph

2Wednesday, April 13, 2016

RIDGE OF HIGH PRESSURE AREAEXTENDING OVER LUZON

EASTERLIESAFFECTING EASTERN SECTION OF

VISYAS AND MINDANAO(APRIL 12, 5:00 PM)

Naguiat: It’s Congress’s job to privatize Pagcor

It’s their call whether they want to amend the law or not,”

Naguiat told the BM, referring to the senators and congressmen who, he said, would have the discretion on whether to amend Pagcor’s legislative charter.

SM Prime Holdings Inc., the coun-try’s largest property developer, said it will issue up to P70 billion

bonds aimed at individual investors in the next three years to partly fund its P180-billion capital expenditures (ca-pex) through 2018.

Jeffrey Lim, SM Prime executive vice president, said the company will apply with the Securities and Exchange Com-mission for the three-year shelf regis-tration of between P50 billion and P70 billion worth of bonds.

The bonds will have a tenor of 10 years or more and will be issued over a three-year period, with the first tranche to be floated in the third quarter of the year, Lim said at the sidelines of the company’s stockholders’ meeting.

“The idea is a third of our capex will be funded by the bonds,” Lim said.

He said the company has all used up its single borrower’s limit from the banks.

SM Prime, known for its chain of malls all over the country, is earmark-ing some P60 billion in capital expen-ditures for the next three years starting in 2016. VG Cabuag

SM Prime to issue P70-billion retail bonds

El Niño, which started to affect the country in February last year, is expect-ed to last until the second quarter of 2016. It is expected to weaken in the coming months, but the United Nations weather agency earlier warned that its impacts could last for many more months to come.

“Despite this, how come govern-ment preparation was weak and neg-ligible?” Ofreneo asked.

IPs go hungryDATA from the Department of Agri-culture (DA) showed that Regions 10 and 12 in Mindanao bore the brunt

of El Niño. Farmers in Region 12 have already incurred losses amounting to P2.46 billion, while those in Region 10 lost P737.36 million. Because of the drought, Dr. Do-mingo M. Non of the Mindanao State University (MSU) said farmers and members of indigenous peoples (IPs) groups are going hungry as they can no longer rely on agriculture. “These people do not have anything to eat. They also have to sacrifice every-thing else. One story I’ve heard from a student is that her aunt does not take her medicine. They don’t even have the capacity to buy food,” Non said.

In General Santos, South Cotabato, he said the lack of rain and irrigation, and pest infestation have made it im-possible for farmers to plant any crop. In particular, Non said the T’boli and B’laan tribes have resorted to other means just to survive.

“They have altered their routine activities. Some of them have to go down from the mountains, to beg, or they offer to work for people who can provide them food,” he added. Non-governmental organizations have been giving aid, such as food assistance, to affected farmers, while agribusinesses have offered to hire

them to work in their plantations.Riza Ming, a 31-year-old T’boli

teacher in Barangay Maan, in the mu-nicipality of T’boli in General Santos, said the IPs resort to cutting small trees and turning them into charcoal to sell.

The little they get from the Pantawid Pamilyang Pilipino Program also helps tide them over, according to Ming. The serious deprivation suffered by farmers and IPs left them with no alternative but to march in a protest rally in Kidapawan City to pressure the local government to give them rice. Two protesters died, while

dozens were injured after they were violently dispersed by policemen. (See BM Reports Extra, April 12).

Ming called on the government to provide IPs with food subsidy, as they can no longer grow crops on their own.

For his part, Ofreneo urged the government to stop dismissing the adverse impact of El Niño on the country’s farm sector.

“They should accept reality and admit the gravity of the situation. This is a crisis of unprecedented propor-tion and the problem with this crisis is, it’s happening gradually but so

pervasively,” he said.He said the government should

provide direct and immediate as-sistance, such as food and medical aid, to the displaced farmers to help them survive. “They should also modify the cash-transfer scheme to accommo-date those who will be displaced. At the same time, there should be an alternative livelihood program,” Ofreneo said. Long-term programs—agrarian, housing and coastal reforms and em-powerment programs—should also accompany these efforts, he said.

The BIR chief, however, declined to say how much PhilRem paid in taxes last year due to the confidential nature of BIR records. She also said, upon questioning by the senators, that the acknowl-edgment receipts issued by PhilRem to its clients “are not legitimate,” as the receipt has to include the com-pany’s tax identification number, the company address, its authority to print invoices, etc. Meanwhile, the registration of re-mittance firms, money changers and foreign-exchange dealers are contained in BSP Circular 471, series of 2005. This revelation by the BSP comes amid the ongoing Senate hearings on the $81-million stolen from the central bank of Bangladesh via anonymous hackers. The money entered the Phil-ippine banking system via RCBC and converted into pesos by PhilRem.

Other government agencies also have no regulatory authority over the operations of remittance firms. “Wala talaga,” Espenilla stressed. “LGUs [local government units] for business permits if you want to count that. But the BSP only stepped forward back in 2005 [to register remittance firms as per BSP Circular 471] because otherwise the Philippines won’t be re-moved from the FATF [Financial Action Task Force] blacklist,” he explained.

The BSP official pointed out that: “Recognizing this limitation, one of our proposed amendments to the BSP

Charter [RA 7653] is precisely to formal-ly place the remittance business under BSP supervision so we can regulate its activity.” He added that the issue “can also be addressed if the proposed Pay-ments System Act is passed.” Passed on third and final reading by the Lower House in January, the proposed Payments System Act (HB 6197) requires the BSP to define and oversee payment procedures and sys-tems that should be in place to ensure monetary stability.

Specifically, the bill provides: “The State shall promote, through the BSP, the safe, efficient, and reliable opera-tion of payment systems in order to control systemic risk and provide an environment conducive to the sustain-able growth of the economy.” Under the present setup, based on BSP Circular 471, all forex dealers (FXDs), money changers (MCs) and re-mittance agents (RAs) are only required to submit to the Anti-Money Launder-ing Council “a report on covered trans-actions and suspicious transactions within five banking days from the date of said transaction, or from date the FXDs/MCs and RAs gained informa-tion that the transaction was done for the purpose of laundering proceeds of criminal or other illegal activities, or from the time the FXDs/MCs and RAs had reasonably suspected that said transactions were entered into for the purpose of laundering proceeds of criminal and other illegal activities.” Under the AMLA, transactions over P500,000 are covered in the reportorial requirements of banks and other com-panies involved in financial transactions.

Feeding 1M farmers now a problem due to El Niño C

Remittance. . . C A