The proposed measure, one of the reform bills being vigorously pushed by the private sector to improve the country’s investment climate, was already approved in the Senate. In a news conference on Tuesday, Speaker Feliciano Belmonte Jr. said, “This Philippine Fair Competition law has been repeatedly filed since the 8th Congress, but it has never suc-ceeded. But, this time [the 16th Congress], I think we will succeed.” “It was through the efforts of Representa-tive Cojuangco of Tarlac, that’s why the bill

will become a law this 16th Congress . . .remem-ber that is one of the longest-pending bills in Congress,” Belmonte added. Cojuangco, uncle of President Aquino, died after suffering an aneurysm on Tuesday at 74, Belmonte said. Liberal Party Rep. Antonio Rafael G. del Ro-sario of Davao del Norte, one of the coauthors of House Bill 5286, or the consolidated version of the proposed Philippine Fair Competition Act, said the measure will be approved on third reading next week.

www.businessmirror.com.ph n TfridayNovember 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 7 sections 32 pages | 7 days a weekn wednesday, May 13, 2015 Vol. 10 No. 216

A broader look at today’s businessBusinessMirrorthree-time

rotary club of manila journalism awardee2006, 2010, 2012u.n. media award 2008

Continued on A8

Peso exchange rates n us 44.6090 n jaPan 0.3714 n uK 69.5454 n hK 5.7535 n china 7.1839 n singaPore 33.3700 n australia 35.2780 n eu 49.7703 n saudi arabia 11.8992 Source: BSP (12 May 2015)

INSIDE

APPLE WATCH: NOT A

MUST-HAVE

BIDIBIDI’S ‘LA HUERTA’

BusinessMirror www.businessmirror.com.phD4 Wednesday, May 13, 2015

Art

By Tito Genova Valientetitovaliente@yahoo.com

BidiBidi has a garden, which she calls La Huerta. Bidibidi has paintings and they are all about the blooms and colors in her garden.

La Huerta, the Spanish term for “vegetable garden,” is more than that. it is a pocket forest along the highway going to a place called Baao in Camarines Sur, Bicol. The place is an artist’s haven, a refuge if you want to dramatize how artists—visual artists in particular—in this country do not have a room or a studio of their own. Every now and then, Bidibidi would hold intimate parties to welcome guests from nearby cities or towns. Sometimes, i get this sense that the celebration is for no reason at all. The celebration is the reason for the celebration. in these gatherings, blooms are on the tables. it is not rare that the lowly quotidian fruit, the macopa, is presented. The sense of color then becomes remarkable as the guests appraise the tenderest of pastel on the skin of the fruit. That tenderness, such fragility, the ephemera of leaves and flowers are in this collection of paintings of Bidibidi. One such work bears the title “fragility has its own intensity.” in her garden, flowers are of consequence; they are not the helpless décor that we think always of them to be. Even as the artist shades the lilac and the ochre and the red, the petals are stubborn shapes suffusing the frame. Behind them is a backdrop of faint yellow and light green, but they do not matter for the flowers have conquered the space. in “dawn awaits,” we encounter the profusion of blooms again, but they seem to give way to a brightening of the horizon. Still strong, the flowers stand to the side. A piece called “too much one, too much each other,” Bidibidi manipulates the practice of a diptych without resorting to two panels. A yellow green backdrop on the left, one notices, is slightly narrower than the blue backdrop on the right. The flowers are separated also with six forming a bouquet on the blue side and two on the left. The humor is not lost on the tradition

of giving flowers, where less is more but where more is really also more given a different occasion. However, i particularly covet the trees of the artist. Where Bidibidi’s flowers are strong and vitally organic shapes, her trees are arresting in their solace and shadow. Textured and zoetic even without the foliage, the trees of Bidibidi are the full narrative of our ecology. in Bidibidi’s woodland, the trees form a cluster of a small forest but each trunk stands singular because of their form and their color. in a grouping of mauve trees surrounded by blue and dark green trunks and twigs, a yellow gnarled trunk twists and rises from the ground that carries the same pale yellow color. Then you realize: it is the sun filtering and singling out a tree. in another painting of trees, six stumps—the middle gloomy in red and deep green, the leftsidemost growth in pallid eggyoke and the rightmost towering in near black shade—are seen amid a cloud of what looks like foliage or a mass of soil. The impact of the arrangement is one of caution and concern. But the artist is not saying anything; she is making us feel something in the forest. in another forest, Bidibidi images for us thin trees. Are they dying or growing? A blue backdrop is the only heavenly item within this frame where growth and decay seemingly form two sides in the life-coin. The works of Bidibidi, without diminishing her own authenticity, reminds me of another Bicolana artist, the italy-based Lina Llaguno-Ciani. Where Ciani’s works are marked by distinct minimalism (her works have been described as “surrealism without angst”), Bidibidi’s trees and flowers subjugate a palette of colors. Bidibidi is a neo-Fauvist, in love with all kinds of colors and shades. i have always wanted to write about this artist mainly because i admire her concern for new artists. i have seen her La Huerta, the empirical garden in her farm. Her service to art, however, is in her ability to color the growth in forests that are either vanishing or becoming, and to pay tribute to the vain and valiant flora in her mind.

THErE’S little doubt that Korean contemporary art has grown at par with its neighbors in South Asia. With

the prominence of Korean visual artists (ie. Haegue Yang, Hyungkoo Lee, et al.) who have brought their art innovations to celebrated international art festivals, like the Venice Biennale, along with other nationalities (blue-chip Filipino artists included), it can be said that Korean visual arts is claiming its share of the limelight in the global art arena. At this time of prominence, ArtistSpace of the Ayala Museum in Makati City features the works of South Korean contemporary painter Christina Cho in her first solo exhibition, entitled Harmony, which opened on May 8 and is on view until May 21. The exhibit is composed of oil paintings depicting striking still life of cacti and lush landscapes borne out of a penchant for travel in Western Europe, specifically in the countries of France and italy. While her contemporaries paint in the harried pace and oftentimes vague contexts of contemporary art, Cho gives a fresh take on the genre of realism and brings her viewers to a utopian world devoid of complication—a world at harmony with nature (hence the title). The theme came from the artist’s catharsis upon

SiLVErLEnS Manila features “reverse Boomerangs and Other Exercises for Pleasure (warm up/cool down),” a

solo exhibition by Catalina Africa on view until June 6. Employing a variety of the media, from painting, video, collage and other combined material and objects, Catalina Africa reexamines and reforms the practice of painting into an enlightened ritual

of self-discovery and sense awareness. in this exhibit, Africa returns to the sensuous gestures of painting, reflecting on its surface and effects, then cooling down with an afterglow from the rapture of painting that began in this two-part exhibit with 1335 Mabini Gallery. Africa thereby continues to fabricate symbolic narratives about her personal work, the world she lives in, and the

interconnectivity of things that describe existence and the experience of life. Africa considers the practice of painting as a time machine in the production of space and the compression of temporal meaning, creating an archive of symbolic gestures and narrative designs. Time here is not constrained to a residual by-product of an event, but rather the catalyzing element within the artistic process.

Bidibidi’s‘La Huerta’

‘Reverse Boomerangs and

Other Exercises for Pleasure’

‘Harmony’ at ArtistSpace

being reminded of Van Gogh, and seeing vast urban terrains in the cities of Arles and Eze, South of France, and in italy, all seemingly at home with nature. Struck by such beauty, the artist began to paint a body of work showing endemic

cacti together with vistas of sunbathed architecture nestled comfortably in nature. She says that with these images, she wants to share the same bliss, calm and peace she experienced during her trips—the feeling of being one with nature.

BidiBidi’s fragility has its own intensity (clockwise) and her forests,which are arresting in their solace and shadow.

aRT d4

Life D1BusinessMirror

BidiBidi’s‘La Huerta’»D4

Powerful Prayer for Marriage, Sharon M. go anD louie M. lacSonWord&Life Publications • teacherlouie1965@yahoo.com

Unity of the spirit

God, our Father, we know that our beloved is so different from us and we are supposed to learn how to

dwell with our spouse in the UNITY oF THE SPIRIT, and we need Your Spirit to help us know how we can both be of one mind, one heart, one body, one soul and to grow together in Christ. This is not pos-sible without Your Spirit, God. Please help us in ways that are reflective, inspiring and uplifting of the similar relationship that the Church has with the Head of the Church, Jesus Christ, in whose righteous name we pray. Amen!

Wednesday, May 13, 2015Editor: Gerard S. Ramos

AppleWatch fun,but not amust-have

Troy WolverTon of the San Jose Mercury news uses an Apple Watch to answer a phone call on April 29, in San Jose, California. GARY REYES/BAY AREA NEWS GROUP/TNS

• lifestylebusinessmirror@gmail.com

WHAT: Apple Watch smartwatch

lIKeS: Bright screen; solid, lightweight case; Maps app signals direction changes with vibrations; some apps offer fun features; alerts easier to view and retrieve than on phone.

DISlIKeS: Pricey; relatively few compatible apps; small screen limits capabilities; Siri voice dictation and control system inconsistent; headline features such as ability to make and take calls not practical.

PrICe: $300 to $17,000, depending on case and band material.

By Troy WolvertonSan Jose Mercury News

After living with the Apple Watch for more than a week, I’m still not sold on it. Up to now, I’ve only

had a chance to use it for short periods, so it’s been fun to test out the new device for a longer span of time. And I’ve gotten a kick out of having people look at my wrist with envy or curiosity. But I just haven’t found much use for it. It has some fun features, but nothing that I couldn’t live without. Having said that, I’m betting that Apple Watch will grow more compelling and may even find its “killer app”. A souped-up version of Apple Pay that replaces not only your credit cards but your keys, boarding passes and transit tickets could be that app; if the watch could deliver that, I’d buy it in a heartbeat. In case you’ve somehow missed it, Apple Watch is the new smartwatch from Apple that the company began shipping last month and that costs anywhere from $350 to $17,000, depending on the model. Like other such gadgets, it tracks your movements, runs apps and, of course, tells the time. I got one the day it came out and have been wearing it ever since. In some ways, the new gadget improves over time and with familiarity. Some of the things that bothered or annoyed me about it when I first strapped it on my wrist became less so the more I wore it. I was initially concerned that it was going to be too thick and chunky for my wrist, for example. I hadn’t worn a watch in several years and the one I did wear was a thin, low-end Swiss Army watch. But after a day or two, it felt natural to be wearing a watch again. It easily fit under my cuff when I wore long-sleeved shirts and was barely noticeable on my wrist. I also found the watch’s interface difficult to master at first, with features that you can only access by knowing in advance—or guessing—that you need to press hard on the screen or twist its cylindrical crown. But after a few days, I more or less got the hang of it and the watch became easier to use. You can probably come up to speed faster than I did by getting lessons at one of Apple’s stores. On the plus side, I had fun trying out some of the watch’s apps. Using the watch’s Uber app, I hailed a car

and was able to track its progress to my location. I was able to scan quickly through the latest headlines using the New York Times’s app. And I used the watch to buy some coffee at Peet’s without having to pull out my credit card, using Apple Pay. Apple’s Maps app, which comes with the device, is particularly cool, because it uses vibrations to alert you when you need to change directions or proceed to the next step in your travels. You can use the app whether you are driving or walking. Because each particular direction—left turn, right turn, straight—has its own unique vibration, you don’t have to look as frequently at a screen to know where to go. features like that make me think the watch could have a bright future. So, too, does the fact that as I used the watch, I found myself relying somewhat less on my phone. Because my phone is typically in my pocket, which helps dampen its ringer and vibrations, I often don’t realize when someone (like my boss or my wife) has called or texted me. Thanks to the watch, I was more likely to get those and other alerts. In other ways, though, the watch became less compelling the longer I had it. In part that’s because some of its standout features are more exciting in theory than they are in actual practice. take for example the watch’s ability to make and take phone calls. People have been wanting to do that since Dick tracy first started sporting his two-way wrist radio. But it turns out that carrying on a conversation via a wristwatch just isn’t that great an experience. That’s because the feature works like a speakerphone. It’s hard to hear a call when you’re outside. And wherever you are, if you can hear what’s being said, so can the people around you. even worse, you have to hold the watch up near your face and keep it there. I found it a lot easier and much more satisfying to just talk on my phone. The watch’s ability to serve as a viewfinder for your phone has a similar shortcoming. It looks cool, but it’s not terribly practical. Unless you frequently take pictures with your phone attached to a tripod or propped up somewhere so you can find just the right selfie pose, you’re probably not going to use it. The watch also suffers from some hard-to-avoid problems. The small screen size limits what you can or would want to do with any of the apps.

While you can scroll through your e-mail inbox on the watch, you probably won’t want to; it can only display one or two messages at a time. It doesn’t have a full keyboard, so if you want to respond to text messages, you have to use a few canned responses or dictate something to Siri, which can be hit or miss. While you can call a car with the Uber watch app, you can’t use it to rate a driver. for these and other features, you end up having to go back to your phone, which often made me wonder why I didn’t just start there in the first place. And since the watch only works when near your phone, it can feel a bit redundant. Apple says there are some 3,500 apps available for the watch, but that’s a tiny fraction of what’s on the market for the iPhone or iPad. Many of the apps I use most, such as my dog-walking app and the app I use to find out when the next train will come, aren’t yet available for Apple Watch. You’re likely to find similar problems. Likewise, as cool as Apple Pay is, few vendors accept it. The number of retailers that take Apple Pay will improve over time, as will the number and breadth of apps available for Apple Watch. The capabilities of those apps will improve as developers figure out what people want to do with them and what works best on such a device. It’s quite possible that Apple Watch or something like it will eventually have a “killer app”. Apple Pay hints at what that could be—the ability to use the device as a kind of universal “card” or authentication system, one that’s even more convenient than your phone. But right now it doesn’t have other features that make it a must-have device. So while the Apple Watch has been fun to wear, I don’t think I’ll miss it much when I take it off.

LIFe d1

MEGAWORLD BULLISH ON MAKATI

E1 | Wednesday, May 13, 2015 Editor: Tet Andolong

BusinessMirror

B R R R

PROPERTY colossus Megaworld said the Makati City central business district (CBD) is a

great growth driver for the company, according to a company executive.

DAIICHI Properties sees a need for quality and performance in of-� ce buildings in the Philippine

property market. “Given that quality is Daiichi’s corporate DNA, we took note of the fact the de� nition of quality has al-ready evolved. Quality is now rede� ned with additional concepts, such as sus-tainability, technology, innovation and design,” Daiichi Vice President for Busi-ness Development Eric Manuel said in a recent news brie� ng held at the Bonifa-cio Global City (BGC).

To pursue this objective, Daiichi formed a partnership with major global architectural � rm Gensler. The company designed the Facebook headquarters, Airbnb o� ces, Uniqlo and the Incheon International Airport.

Aleksander Zeljic, senior associate at Gensler, said he observed Filipinos com-monly looked for the cost of the rent, the utilities available, proximity to leisure, landmarks and other establishments. “It’s not really how the building looks, but how it performs,” he said.

At present, Manuel said Daiichi is currently looking for opportunities in BGC, as it is being positioned as a major masterplanned business community as global companies seek to expand or es-tablish operations in the Philippines.

Zeljic noted that the former military base holds great potential for business and Daiichi is in a strategic position to be a part of the developments in the area.

“With its consistent focus, Daiichi is going to be able to establish major busi-ness landmarks in BGC,” he said.

“We’re positioning BGC as the top busi-ness hub in the Philippines,” Manuel said.

Zeljic said the partnership with Dai-

ichi has become very productive and fruitful as they have developed One Tai-pan Place and Orient Square—Daiichi’s � rst two buildings in Ortigas.

Manuel said their alliance with Gensler goes beyond the developer-contractor relationship. “We are partner-ing with a � rm that studies global trends in o� ce design with the idea of creating a building that meets or exceeds interna-tional standards relevant 30 years from now,” Manuel said.

“It is a di� erent type of relationship and what it means is that our buildings are no longer just about the taste of a local developer, but what is globally im-portant,” Manuel added.

Daiichi was noticed by Gensler when it cited the developer’s The Finance Cen-ter for designing a workplace to boost productivity of the millennials. It was the only building in the Philippines to be rec-ognized in the report.

Furthermore, Daiichi’s One World Place in BGC is a Grade A premier corporate center that is Philippine Economic Zone Authority-accredited and pre-certi� ed Leading Engineering and Environment Design Gold.

One World Place was awarded by the Asia Property Awards as the Best O� ce Development in the Philippines for two consecutive years, starting 2013.

Rey Fuentes, Daiichi vice president of the management group, said that the company supports the development of green buildings because it also allows workers to be more productive. “Green buildings will also be a major factor in development as investors will give prefer-ence to these facilities when they invest in the country,” he said. Rizal Raoul Reyes

E1 | Wednesday, May 13, 2015 Editor: Tet Andolong

BusinessMirror

“� e good economic condition that the country has enjoyed since last year is largely felt in the Makati CBD. � e of-� ce spaces are getting � lled up and the retail industry is on an all-time high. � at is why our residential condomini-ums, all located in premium addresses, are also in high demand. With this, we invited the big names in the industry to shed light on and highlight the posi-tive economic growth our country has been experiencing and how it bene� ts the property industry that we all should de� nitely take advan-tage of. Megaworld has never been more certain that the best time for investing is now,” said Eugene Lo-zano, Megaworld vice president for sales and marketing, in a recent in-terview held in Makati City.

“As Makati continues to establish itself as the top location for real-es-tate investment, Megaworld is poised to aggressively expand its residential condominium portfolio in this pre-mier city,” Lozano added.

In order to sustain the strong de-mand for Megaworld properties in the Makati CBD, it announced that it is set to launch three more residential projects until 2016. � e new residen-

tial towers will be part of the compa-ny’s e� orts to increase the portfolio of property developments in Makati to more than 30 towers by 2016.

Megaworld is one of the biggest residential condominium and o� ce developers in the Makati CBD, with around 27 o� ce and residential tow-ers in its portfolio in the country’s � -nancial center.

Aside from being one of the larg-est developers in the Makati CBD, Megaworld is also known for being the country’s biggest developer and pioneer of integrated urban town-ships across the Philippines.

To date, the company has intro-duced 17 townships: the 18.5-hectare Eastwood City in Quezon City, which is the � rst cyberpark in the Philip-pines; the 25-hectare Newport City in Pasay City, home of Resorts World Manila; the 34.5-hectare McKin-ley West, 50-hectare McKinley Hill, 15.4-hectare Uptown Bonifacio and 5-hectare Forbes Town Center in Fort

Bonifacio; the 28.8-hectare � e Mac-tan Newtown in Lapu-Lapu City, Cebu; the 72-hectare Iloilo Business Park in Mandurriao, Iloilo; the 12.3-hectare Woodside City in Pasig; and 11-hect-are Davao Park District in Davao; as well as the 350-hectare Suntrust Ec-otown, under its wholly owned sub-sidiary Suntrust Properties Inc. and Geri’s 62-hectare Alabang West; the 561-hectare Southwoods City in the boundaries of Cavite and Laguna; the 150-hectare Boracay Newcoast in Boracay Island; the 1,300-hect-are Twin Lakes in Tagaytay;  and the newly launched 34-hectare � e Upper East and 50-hectare Northill Gateway, both in Bacolod. 

During the event, two speakers discussed the positive economic outlook of the Philippines and how it will impact the booming real-estate industry—Francis Kong and Randell Tiongson.

Kong is a multifaceted life mentor with extensive work experience in the manufacturing and retail com-merce, who provided a strategic edge in delivering diverse talks, training sessions and seminars locally and in-ternationally. Tiongson is one of the country’s most respected personal-� nance coaches and a strong advo-cate of life and personal � nance with 25 years of � nancial-service industry experience. He discussed the impor-tance of a property investment in one’s wealth bank.

On the other hand, Tiongson tack-led why it’s best to invest now (from macroeconomic POV to real-estate investment bene� ts) and why Makati remains the most lucrative option, as well as the current state of the real-estate bubble concerns.

DAIICHI, GENSLER UPLIFT OFFICE QUALITY STANDARDS

THREE Central

RANDELL TIONGSON

GREENBELT Hamilton Tower 2

PASEO Heights

THE Gensler-designed The Finance Centre is poised to be a 44-story tower with two floors dedicated to retail, one for health and wellness amenities, 31 floors of office workplace and a penthouse-level executive office.

MEGAWORLD BULLISH ON MAKATI INVESTMENTS

FRANCIS KONG

DAIICHI’S One World Place in Bonifacio Global City is an award-winning commercial development that recently reaped the title of Best Office Development for 2013-2014 at the Asia Pacific Property Awards Development.

THE 27-story premium Grade A office building, with 32,753 square meters of leasable space, is positioned to meet the needs of leading companies.

PROPeRTy e1

n The Public-Private Partnership (PPP) Program was conceived to plug the holes in the country’s infrastructure. It started with a mere number of projects in the pipeline, the bulk of which are under the Department of Transportation and Communications.

n The P2.2-billion Daang Hari-South Luzon Expressway deal was rolled out. Investors with existing concessions in thoroughfares rushed to buy bid documents to participate in the auction, taking the challenge with a careful mind-set. The project was bagged by Ayala Corp.

n The government tapped the expertise of several research agencies to develop the pipeline of projects. It awarded the P16.42-billion first phase of the PPP School Infrastructure Program (PSIP) to Megawide Construction Corp.

n Several infrastructure projects were rolled off, but the PPP Center was still developing the program's policies. It awarded two projects to Megawide that year: the P3.86-billion PSIP Phase II and the P5.69-billion Modernization of the Philippine Orthopedic Center. The P15.68-billion contract for the construction of the second phase of the Ninoy Aquino International Airport Expressway was also awarded to San Miguel Corp. unit Vertex Tollways Development Inc. in 2013. This was the first time that the government received a premium offer for a project. The bidding for the P64.9-billion Light Rail Transit Line (LRT) 1 Cavite Extension failed due to low participation. The private sector complained that the project was unprofitable due to real-property tax. The government decided to sweeten the deal.

n The program rose from the ashes of the year prior, revamping the rules, and making the projects more palatable to investors. Government officials were quoted as saying that they learned from the errors of the past. It awarded the P1.72-billion Automatic Fare Collection System contract to AF Payments Inc. of Ayala and Metro Pacific Investments Corp. in 2014; the P17.5-billion Mactan-Cebu International Airport New Passenger Terminal deal to Megawide; and the P64.9-billion LRT Cavite Extension project to Ayala and Metro Pacific. The projects, however, were those that were launched the year prior. Market sounding in several Asian, European and American countries were also launched.

n As a last push, the government rolled out about 13 projects, while targeting to auction off more. The P2.5-billion Integrated Transport System Southwest Terminal was won by Megawide and partner Walter Mart Property Management Inc. of billionaire and retail magnate Henry Sy Sr. in January. The National Economic and Development Authority Board convenes more frequently than ever to discuss and approve potential projects. As of May, none of the nine awarded contracts has been finished.

2010 2011 2012 2013 2014 2015PPP timeline

BM G

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AVAD

will PPP, P6.58-t infra binge end Pinoys’ transPort woes?SpEcIal rEport

Competition bill nears passagehouse oK’s Phl fair comPetition act on 2nd reading on the day one of its coauthors died

aBC 24TH aNNIVeRsaRy Rey Langit, DWIZ station manager; alex Magno, Karambola anchor; Ricky alegre, VP for corporate affairs of the BusinessMirror; ambassador antonio L. Cabangon Chua, chairman of aliw Broadcasting Corp. (aBC); Josephine Reyes, president of aBC; and alex santos, DWIZ news director, at the celebration of aBC’s 24th anniversary at its head office in Pasig City. STEPHANIE TuMAMPOS

Continued on A2

By Lorenz S. Marasigan

Conclusion

TRUE enough, the pace of the imple-mentation of public-private partner-ship (PPP) projects is a bit slow that,

out of the nine awarded deals, not even one has seen completion.   The slowpoke construction of the much-needed facilities, industry players said, could be attributed to the delayed delivery of the right of way. In some cases, like the deal for the modernization of the Philip-pine Orthopedic Center, a newly appointed government official steps in and “reviews” the contract, pushing back the timeline of the project.   But the PPP Program is gaining traction, thanks to the mistakes in the past. In fact, it has been, at one point, recognized as the best initiative of its kind in the Asia-Pacific region, enticing neighboring countries to seek assistance from the PPP Center in developing their own infrastructure thrust. 

By Jovee Marie N. dela Cruz

The house of Representatives honored Tarlac Rep. enrique M. Cojuangco, who passed away on Tuesday morning, by passing on

second reading one of the bills he coauthored—the Philippine Fair Competition Act—moving it one step closer to hurdling the lower chamber.

BusinessMirror news@businessmirror.com.ph Wednesday, May 13, 2015A2

BMReportscontinued from A1

Will ppp, ₧6.58-T infra binge end pinoys’ transport woes?

See “PPP,” A8

It is, thus, important for the program to be continued by the next generation of lead-ers of Asia’s rising tiger.   “Continuity of the program is most impor-tant,” PPP Center Executive Director Cosette V. Canilao said. “Our goal is to leave a very good PPP program, and I think we’ve shown already that it can be done with the proper risk allocation, clear institutional roles and a very transparent manner of process and policies.”  The passing on of the baton, she under-stood, carries uncertainties, as what the private sector has pointed out.   Metro Pacific Investments Corp. CFO David J. Nicol mentioned another type of risk that investors and lenders are consid-ering before investing in the $272-billion economy’s infrastructure program.  “Our investors are hardworking folks in the Philippines and savers all around the world. The universal questions we are being asked by their fund managers in Manila, Singapore, London, New York, Washington—indeed, in the major financial centers of the world—are: One, how can we possibly justify investing their money in more projects; and, two, why should they leave their already invested money in the business?” he told the BusinessMirror in an interview.  “Personally, I now see this as worrisome for the whole question of equity risk in the Philippines, and it’s well beyond tariff set-ting for roads and water—it goes to respect for contract in every sense,” Nicol added, cit-ing the Bureau of Internal Revenue’s move to challenge tax holidays previously granted by the Board of Investments.  Basically, this puts into question the sanc-tity of the whole program when handled by someone else’s hands.   “Investors want the administration to ‘stick to the deal’ and, in a world crying out for infrastructure investment, they will quickly move their money elsewhere if that’s not the

case,” Nicol said.  But these risks, Canilao said, can never be removed. They can, however, be cushioned and mitigated through proper allocation and management.   “You can only shift the risk. The risk is always there; it does not disappear. It’s a matter of who takes the risk. It is shifted like, for example, there is a risk that the government absorbs, while another, the private sector. The way to diffuse that risk is through insurance—risk allocation and risk management,” she said.   Despite all these talks on uncertainties, lo-cal and foreign investors and lenders are still keen on aiding the Philippines in developing its infrastructure. And they all agreed on one thing: Continue the infrastructure program with consistent and clear regulations.  “I think that’s one of the biggest concerns, at least for the Japanese commercial investors and lenders, so we would like to see the con-tinuance of the commitment of the Philippine government, and we really want to move for-ward with these PPP projects, because I, think, everyone is saying that, in order to proceed with a PPP project, we need clarity, consis-tency, and I wholly agree with that,” Japan Bank for International Cooperation (JBIC) Manila Representative Hideki Hiramoto said.   Eduardo V. Francisco, the president of investment banking firm BDO Capital and Investment Corp., said the whole SM Invest-ments Corp. of the Sy family has already learned its lessons with the changes in the administration. But regardless who sits at the helm of the Philippine government, the company, he said, will continue to extend its support to improve the state of the in-frastructure in the country.  “We trust that there are enough institu-tional memory and transparency—and, at least, that’s what the government has done today. The next government will, hopefully, follow and instill these also. So we are confi-dent that, even with the elections, the PPP Program will continue. We’re always very

bullish about the economy; the key is to be with the very strong proponents. And, I guess, we just have to manage the regulatory and political sides,” he said.   Ricky Sy Ng, senior vice president of the Bank of Tokyo-Mitsubishi UFJ Ltd., chal-lenged the government to further attract financial and commercial banks into lending investors to fund their bids for PPP deals in the coming future.  “It is crucial that there should be proper risk allocation. There is a tendency on the part of the government to put too much risk on the private sector. The bid process should also be transparent—from the start of the tender to the postaward. And third, there should be legal and regulatory predictability. We do not want to see adverse changes in the administration. In the international banks’ point of view, the government must mitigate that risk,” he said.   Also, policies should be more responsive to investor needs, Macquarie Capital Head for Infrastructure in Asia John Walker added.   “Policies need to be more holistic and coordinated across government. They also need to include developing better and more educated national savings pools,” he said. “It is time for the private sector to define their standard, and present these as opportunities for the government.”   But the private sector also agreed that the PPP Program has been institutionalized and has been improved immensely a few years after it was launched in late-2010. Hence, these reforms should be adopted by the next set of leaders of the national government.  “With the success of PPP in this adminis-tration, whoever will come next should ap-preciate the efforts of the PPP Center. I hope they will continue, as any administration will benefit from the projects of this administra-tion. The PPP Program is really working,” Megawide Corporate Information Officer Louie B. Ferrer said.  Ayala Corp. Managing Director John Eric T. Francia, for his part,

said the company will continue to support the program, no matter who the next leader of the country is, as long as it continues to have clear and transparent regulations.  “We will bid in PPP projects selectively. I believe bidders should be made comfortable that future bid processes do not cross over the next administration, as it may pose bid-com-pletion risk. Projects that have been awarded should be okay, as these have been bid out in a transparent manner,” he said.   San Miguel Corp. President Ramon S. Ang said his company will still be relentless in ushering the Philippines to its economic boom with the development of infrastructure around the country.   Indeed, the current administration has done a good job in improving the program, investors agreed, and these include being open to constructive criticism, being patient with the private sector’s qualms, and modernizing decades-old practices and policies.  “We are now institutionalizing the PPP Act. I hope we could get that before this ad-ministration ends so that it’s all systems go for the next one,” Canilao said.   Essentially, the PPP Act is the amendment of the Build-Operate-Transfer law, which is the very cornerstone of the program.  When approved, the PPP Act would institu-tionalize the Project Development and Monitor-ing Facility, the PPP Governing Board and the contingent liability fund. The proposed amend-ments include the separation of regulatory and commercial functions of government-owned and -controlled corporation, and create a list of projects called Projects of National Significance.  By virtue of being included on the list of projects of national significance, projects will be “insulated” from local laws, among others, by local government units.  The proposed amendments also include allowing time-bound temporary restrain-ing order and the extension of the period for Swiss Challenge to six months from the

current two-month period.  The amendments are expected to be ap-proved within the term of President Aquino.  “I think, we all know that this admin-istration was really focusing on clarity of procedures and rules and regulations, and we honor that. We just want to see the next administration to honor what the past ad-ministration has done and to continue them,” JBIC’s Hiramoto said.   The efforts of the PPP Center, Canilao said, should not be put in vain. She advised the next administration to start from where her group had ended and continue the program, while improving the policies through hearing all the stakeholders involved in a project.   “We’ve clearly revealed the dearth in our infrastructure. Our infrastructure is not enough to support the current and the fu-ture population. So it will now be the role of the private sector and the media to make the new administration accountable. That’s the reason we keep on doing conferences so that the people could track the progress of the program when the next administration comes into helm,” she said.   Transportation Secretary Joseph Emilio A. Abaya and Canilao share the same view: that the next executives of the government are lucky enough that they no longer have to start from scratch. The program that ultimately aims to plug the holes in the country’s infrastructure, they said, has already been developed.  “The next administration does not need the lead time that we needed two or three years to make the PPP Program work. When the next set of leaders come in, they could immediately implement or bid out any proj-ect under the pipeline,” she said. “Ang dami ninyong bala para kulitin ang susunod na ad-ministrasyon.”  Abaya said not adopting the PPP policy of the Aquino government would be illogical for the next. 

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Wednesday, May 13, 2015 A3BusinessMirrorThe Nation

The Armed Forces Western Com-mand chief, Vice Adm. Alexander Lo-pez, however, did not say as to how it was carried out. The harassment happened on the eve of the visit of top military officials, headed by the Armed Forces chief of staff, Gen. Gregorio Pio Catapang Jr., to Pagasa Island. The visit also allowed the party, who included at least 20 journalists, to pass by the other islets owned or claimed by the Philippines, and even

near the reefs, particularly Subi, where China is doing reclamation work. In the past, the harassments or challenges of Chinese vessels of pa-trolling Air Force or Navy planes were made with the firing of flares, and they come with a warning that the Filipino pilots were entering Chinese territory and they should fly back. The Filipino pilots ignored the warnings. Lopez said the last challenge was made on Sunday, just more than a week after the military reported to the Sen-

ate the behavior of China on the West Philippine Sea (WPS). Lopez said Sunday’s harassment, the seventh since April this year, still involved a Nomad plane. On Monday Catapang and his team flew over the islets claimed by the country and even near the Subi Reef, but Lopez said the flight was not chal-lenged or harassed by China. “I would like to think that is because the issue has been inter-nationalized,” he said. “They are challenging us, but we are navigating in international air-space, and they do not have that right or authority to challenge any or all aircraft passing through that inter-national airspace,” he added. A legislator, meanwhile, said the departments of Foreign Affairs and National Defense should come up with a clear plan of action to stop the unabated assertions of ownership and massive reclamation activities of China on the WPS. Nationalist People’s Coalition Rep. Win Gatchalian of Valenzuela,

who has filed House Resolution 2059 to direct both House committees on Foreign Affairs and National Defense to conduct a joint inquiry, said he wanted Congress to know the steps being taken by the government in the standoff with China in the con-tested Kalayaan Island Group, known internationally as Spratlys. “China shows a wanton disre-gard of our rights and a blatant disrespect of our country. Their no-tion of being a superpower is now being expressed through coercion and creeping invasion of its neigh-bors’ territories,” said Gatchalian, a majority member of the House Committee on Foreign Affairs. Recent aerial and satellite images have confirmed reports of large-scale construction of permanent structures on the contested areas, including banks, reefs and low-tide elevations, which do not even qualify as islands, as well as small inhabitable coral pro-jections, which are considered “rocks” under the United Nations Convention on the Law of the Sea. With Recto Mercene

Chinese ships continue to harassPhilippine patrols at Spratlys

By Rene Acosta

CHINESE ships deployed near the reefs within what Philippines-claimed area in the

Spratly Island Group have continued to challenge or harass Philippine military patrols in the area, with the last one having occurred on Sunday.

By Jovee Marie N. dela Cruz

T HE leaders of the House of Representa-tives have asked the House Ad Hoc Com-mittee on Bangsamoro basic law (BBL)

to defer its voting on the measure to give other members a time to scrutinize the bill, Speaker Feliciano Belmonte Jr. said on Tuesday. Belmonte, in a news conference, said that the decision of the House leaders to ask the panel to defer the voting, which was originally set on Tuesday and Wednesday, was arrived at during their meeting on Monday night. “We thought it is better to have an actual draft of the BBL as preliminarily amended… actually [Centrist Democratic Party] Rep. Ru-fus Rodriguez of Cagayan de Oro, [chairman of the 75-man House Ad Hoc Committee on BBL], made a working draft of the BBL. To-day [Tuesday] it will be distributed, so the members can study it before the voting on Monday,” he said. Belmonte said that the voting for the pro-posed BBL at committee level will resume on Monday next week. Meanwhile, House Independent Bloc leader and Lakas Rep. Ferdinand Martin Romualdez of Leyte said the decision to defer the voting on BBL was triggered by the lack of support from lawmakers to pass the measure. “This development indicates that the

House majority has no solid number to pass the BBL because even their allies believe that Congress should not hurry the approval of a very vital and important measure,” Romualdez said. He said Congress should not pass the BBL under duress. “The strong clamor to deliver justice for the victims of Mamasapano clash remains, and the government and the Moro Islamic Liberation Front must ensure that this re-quirement is met,” Romualdez said. He, however, admitted that the move of the panel to defer the BBL voting next week was a laudable act to allow members to study the proposed amendments. On the other hand, Belmonte expressed confidence that the majority has enough sup-port to approve the measure. But he admitted that the decision to suspend the voting will affect the lower chamber’s timetable, saying, “the timetable is somehow affected, but not that much.” Meanwhile, Rodriguez said that the committee report of House Bill 4994, or the proposed BBL, will be submitted to the House in plenary session on May 25 for second reading. He added that Congress is eyeing to pass the proposed BBL, which seeks to stop the conflict in Mindanao, on June 11, or before Congress sine die adjournment on June 12.

BBL panel defers voting on bill

BPI Ka-Negosyo coPreseNts FraNchIse asIa PhL 2015 BPI Ka-Negosyo will again be a major partner of the Philippine Franchise Association (PFA) in furthering the growth of the franchising industry as copresentor in the staging of the Franchise Asia Philippines 2015 from June 10 to 14 at the SMX Convention Center Manila. Photo shows PFA officials, led by its Chairman Emeritus and the Father of Philippine Franchising Samie Lim (second from right), chairman of BLIMS Lifestyle Group; Chairman Elizabeth “Yvette” Pardo-Orbeta (right), chairman of Wendy’s Philippines; President Franklin Go (second from left), vice president of Goldilocks Bakeshop; and Franchise Asia Philippines 2015 Expo Chairman Jose P. Magsaysay (left), CEO of Potato Corner, renewing their partnership with a handshake with BPI Ka-Negosyo Franchising Loan Business Development Manager Jomel Cruz after the signing ceremony. Franchise Asia Philippines 2015, organized by PFA and supported by the World Franchise Council and the Asia Pacific Franchise Confederation, is the biggest franchise show in Asia. Now on its 22nd year, the country’s longest-running franchise show will feature a two-day international franchise conference (June 10 and 11), a three-day international franchise expo (June 12 to 14), the Certified Franchise Executive program (June 8 and 9) and educational seminars for aspiring franchisors and franchisees (June 12 to 14) simultaneous with the expo.

BusinessMirror news@businessmirror.com.ph A4

Economy

By Lorenz S. Marasigan

COMMUTERS on a budget will soon have a cheaper choice in getting in and out of the main gateway in Manila, as the Department of Transportation and

Communications (DOTC) moves to modernize its trans-port rules to address the traffic woes around the country.

Airport bus services—which are available in dif-ferent countries around the globe—are expected to be launched soon, giving airline passengers and airport employees an option apart from regular and accredited taxi cabs, which charge about 10 times more than a regular bus service.

“For arriving airline passengers, the first trip is get-ting from the airport to their homes, hotels and business centers. We are expanding their options to modern buses, so they will not have to rely on taxis alone. This is part of our bus-reform program, which will improve passenger safety and convenience,” Transportation Secretary Joseph Emilio A. Abaya said on Tuesday.

Under this new category, which the transport agency will publish later this week, airport buses will be required to comply with improved service levels, such as being equipped with onboard closed-circuit television cameras, global positioning system (GPS) devices, automated bus arrival electronic displays, cashless or automated fare collection systems and free Wi-Fi.

Airport buses will be required to follow scheduled trips and designate off-street stops for loading and unloading to avoid obstructing the roads. Booking offices will also be required.

Technical features such as low floor height within a range of 0.28 meters to 0.38 meters, as well as appropri-

ate luggage compartments, will be required for passenger convenience. In line with environmental sustainability, airport buses should be compliant with Euro V emis-sions standards or better, or run on clean alternative fuels such as electric or hybrid vehicles.

“These higher-capacity vehicles will benefit not only travelers and tourists, but also airport employees and greeters. We hope that with more efficient use of road space, this will help ease traffic congestion around air-ports, as well,” the transport chief added.

Apart from airport buses, the Bus Rapid Transit sys-tem will also be recognized as a new classification of public-utility vehicles.

“We can boost mobility by promoting high-quality systems that efficiently transport large volumes of passengers. These new bus categories are cost-effective solutions that can cut down travel time, aid in decon-gesting clogged streets and enhance passenger experi-ence through scheduled trips and orderly boarding and alighting procedures,” the Cabinet official said.

The DOTC and the Land Transportation Franchising and Regulatory Board have begun increasing service level standards for existing public-utility buses (PUB) as well, such as by phasing out buses older than 15 years, and requiring the installation of GPS devices later this year, which will improve the regulators’ ability to monitor and penalize erring PUBs.

The Green Frog Hybrid Bus has expressed interest in the airport bus service, Abaya said.

“Separately, routes that have been considered are for three areas: Makati, Mall of Asia and Bonifacio Global City or Ortigas—for both tourists and local travelers; all still for determination,” he said.

THE Philippines must continue to diversify its roster of manufactured goods if the country is to sustain the positive growth in its manufacturing

output in March, according to the National Economic and Development Authority (Neda).

The country’s manufacturing output grew 13.6 per-cent in March, according to the Monthly Integrated Survey of Selected Industries (Missi) released by the Philippine Statistics Authority (PSA) on Tuesday.

This is the fastest Volume of Production Index (VoPI) growth since December 2013, when VoPI im-proved 22.8 percent.

“Diversification of products and market is vital to maintain our presence globally amid the low demand from the country’s major trading partners,” Economic Planning Secretary Arsenio M. Balisacan said.

Balisacan said the Comprehensive National Indus-trial Strategy will contribute to the realization of the potential of the country’s manufacturing sector.

The Neda chief also said the government will con-tinue to pursue efforts to improve the investment climate to attract business expansion, as well as new investments in the manufacturing sector.

Balisacan said the bright prospects are seen on the back of the first-quarter recovery in manufacturing.

“Robust private consumption fueled by continued inflow of remittances will thrive in the current low-inflation environment. The low global oil prices sus-taining low inflation, as well as Philippine business optimism, will drive businesses to capitalize on low cost of production,” he said.

Neda said petroleum posted a 60-percent growth in production value and a 95.9-percent increment in production volume.

For capital goods, growth in basic metals and trans-port production, particularly in nonferrous metals, iron and steel was able to offset the performance of fabricated metal products and machinery, including electrical.

“The growth in transport is mainly due to the gov-ernment’s refleeting program which amplified the

demand from the public utility sector,” said Balisacan, who is also Neda director general.

PSA data also showed that the Value of Production (VaPI) recovered from its negative position with a 7.4-percent improvement in the same period.

This is the first positive growth posted by the VaPI in 2015 and was the highest since the 8-percent growth it posted in October 2014.

Neda said for consumer goods, production value of tobacco and beverages continued to be vigorous in the first quarter, which is attributed to the implementation of uniform excise tax on local and foreign cigarettes.

For intermediate goods, production values in all goods, except for wood products, expanded year-on-year, driven by petroleum, chemicals and textile.

“This rebound in March suggests a promising first- quarter manufacturing performance. The Philippine business sector maintains expectations of favorable performance in the near term and growth drivers in the past year are expected to perform positively in the next period,” Balisacan said.

Meanwhile, the average capacity utilization rose in March 2015 to 83.5 percent, higher than the first- quarter average in the previous year of 83.1 percent and the overall 2014 average of 83.4 percent.

The manufacturing sectors that posted high aver-age capacity utilization rates were basic metals with 88.7 percent; petroleum products, 88.2 percent; non-metallic mineral products, 86.2 percent; and machinery except electrical, 84.9 percent.

The PSA said 26.3 percent of the surveyed estab-lishments operated at full capacity in March. More than half, or 55.5 percent, of manufacturing sectors operated between 70 percent and 89 percent, while the remaining 18.2 percent operated below 70 percent.

“The rise in average utilization levels this month may be a result of increased activity in manufacturing and construction,” Balisacan said.

The Missi regularly provides timely flash indicators that monitor the performance of growth- oriented in-dustries in the manufacturing sector. Cai U. Ordinario

“Over the the near term, production disruptions from unpredictable weath-er patterns remain one of the biggest risks in attaining the country’s export targets, particularly in the agro-based products,” National Economic and De-velopment Authority (Neda) Director General and Economic Planning Sec-retary Arsenio M. Balisacan said.

With this, Balisacan said the coun-try must actively pursue and continue initiatives strengthening the capac-ity of various industries to be resil-ient against calamities and extreme weather conditions.

These initiatives include the Cli-mate Smart Agriculture for the agri-culture sector, the Nationwide Opera-tional Assessment of Hazards and the establishment of agro-meteorological stations in highly vulnerable areas, among others.

Balisacan said although agro-based commodities only account for less than 10 percent of the country’s export rev-enues, the agriculture sector’s contri-bution to employment is significant at over 30 percent of the labor force.

“Over the medium term, infra-structure development as a means to support agriculture production must be prioritized in order to improve

the competitiveness of the sector,” Balisacan said.

Data from the Philippine Statistics Authority (PSA) showed the country’s export earnings recovered from a three-month slump to a growth of 2.06 percent in March. Export earnings in March reached $5.377 billion, higher than the $5.268 billion recorded value in March 2014.

Exports data are seen to recov-er in the coming months from the slump in the first quarter, as econo-mists from international banks see improved demand for the country’s international markets.

In separate notes, JPMorgan and Standard Chartered said the recent weakness in exports was largely caused by the dismal economic performance in the region, thus, weakening the de-mand for Philippine goods. As such, this dry spell will likely be put to an end in the coming months, as increased demand is seen looking forward.

For JPMorgan, exports will start to recover in the second quarter of the year, while Standard Chartered see a more delayed recovery at the start of the second half.

“There should be some positive payback in the second quarter for the

Wednesday, May 13, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

recent weakness, which would also coin-cide with another anticipated tech product launch in April or May,” JPMorgan said.

“We expect export growth to increase in the second half as demand from Asia im-proves,” Standard Chartered, on the other hand, said. Standard Chartered added that electronic exports will support the recovery expected in the coming months.

“Electronics exports continue to perform better than nonelectronics exports, and strong electronics imports in recent months indicate that electronics export growth will continue to support overall growth,” Stand-ard Chartered said.

Despite the slight uptick in March export earnings, the country’s total exports growth in the first quarter was flat at 0.2 percent. Total merchandise exports in the Janu-ary to March 2015 period was $14.247 bil-lion, almost the same as the $14.277 billion posted in the same period last year. Nonetheless, Neda pointed out that in East and Southeast Asian region, only the Philippines and Vietnam recorded positive growth in March, while others posted nega-tive export growth. “Considering that exports have been de-clining since December 2014, the perform-ance of the country’s exports for March 2015 is a welcome development, as exports are starting to revert back to positive territory,” Balisacan said. “Moving forward, growth in exports will likely be driven by favorable economic environment in the United States, and in part supported by cheap oil prices and accommodative monetary policy in the European Union.”

Data showed that the country's top export markets in March 2015 were Japan including Okinawa with a 20.8 percent share, followed by the US including Alaska and Hawaii with 16.4 percent and People’s Republic of China with 10.9 percent.

Exports to Japan amounted to $1.118 bil-lion. However, it decreased by 15.6 percent from $1.325 billion recorded value in same month a year ago. Shipments to the US were valued at $879.54 million in March 2015, up 23.2 percent.

Economists: Exports on the road to recovery

By Cai U. Ordinario & Bianca Cuaresma

Unpredictable weather patterns pose a threat to the country’s export growth in the

near term, although on the bright side, international market conditions could provide exporters the needed push on their road to recovery beginning in the second quarter, economists said.

Diversification key to sustained manufacturing growth—Neda

DOTC to launch better airport bus services

briefslawmaker wants to criminalize

withholding of ofw passportsThe president of the Partido Demokratiko Pilipino Lakas ng Bayan (PDP Laban) wants to criminalize the withholding of passports by recruitment agencies and employers victimizing overseas Filipino workers (OFW’s). Sen. Aquilino Pimentel III, who is also the chairman of the Senate Committee on Justice and human Rights, said offenders found guilty under his bill would be jailed and fined heavily, and dismissed from service for incumbent public officials. Under the proposed measure, any person found guilty of the crime of “Illegal Withholding of Passport” would be imprisoned for not less than six years and one day but for not more than 12 years. In addition, the offender would be fined P1 million but not more than P2 million and for public officials automatic dismissal from service and perpetual absolute disqualification to hold public office. Recto Mercene

‘save las piñas-parañaque bird sanctuary’A neTWORk of cause-oriented groups and advocates is appealing to the international community to help put pressure on the Philippine government to spare Freedom Islands from the planned massive land reclamation along Manila Bay in the Las Piñas-Parañaque area. Dubbed the Las Piñas-Parañaque ecotourism Critical habitat and eco-Tourism Area Project, the proposed development partly affects Freedom Islands, situated at the boundary of Las Piñas and Parañaque, and threatens to destroy the island’s ecosystems through the reclamation of 635 hectares of shoreline in front of the sanctuary. “If this happens, Freedom Islands will be destroyed,” says Glay Macabale, campaign director of the Save Freedom Island Movement. The group noted that Freedom Islands is supposed a Protected Area as mandated by Proclamation 1412 signed by former President Gloria Macapagal-Arroyo.

Oil companies raised the prices of their petrole-um products on Tuesday

morning. in separate advisories sent on Monday night, the oil firms said they raised the price of gasoline by P0.50 per liter, diesel by P1.10 per liter and kerosene by P1.25 per liter. The oil-price hike was the sec-ond price-upward adjustment this month and the fourth consecutive since April 21. Petron Corp., Pilipinas Shell, Cal-tex Philippines, PTT Philippines, Total and Phoenix Petroleum said the price adjustment reflects the continued upward movements in the prices of refined petroleum products in the international market. Based on latest Department of Energy monitoring as of April 28, Dubai crude price increased week-on-week by about $1.70 per barrel. likewise, MOPS gasoline and diesel had increased by about $3 per barrel and $1.50 per barrel, respectively. With the recent price movement, year-to-date adjustments stand at a net increase of P4.52 for gasoline and P1.86 for diesel. Lenie Lectura

National Economic and Devel-opment Authority (Neda) Director General and Economic Planning Secretary Arsenio M. Balisacan said the government expects household consumption to slow in the first quarter of 2015, compared to the same period in 2014. “[in] the first quarter last year ang taas ng growth ng remittances because [of] Yolanda, so [there is a]

likelihood that remittance growth this year, first quarter, [would be] slower because of the base effect. [This] would, of course, affect your consumption growth,” Balisacan told reporters on the sidelines of the Second EU-Philippines Business Dialogue on Tuesday. Household consumption grew 5.9 percent in the first quarter of 2014, the same as the growth rate posted

news@businessmirror.com.ph Wednesday, May 13, 2015 A5BusinessMirrorEconomy

By Joel R. San Juan

THE Bureau of Customs-intelligence Group (BOC-iG) is now conducting an investigation into the unauthorized release of a shipment containing P12 million worth of counterfeit

drugs even after it has been placed under an alert order. The probe was initiated after an official of a brand protec-tion specialist company informed the BOC about the anoma-lous release of the shipment and sought an immediate conduct of the probe. The official also asked the customs intelligence group to trace the whereabouts of the counterfeit drugs, most of which were maintenance drugs for diseases like diabetes and hypertension. Prior to the release of the shipment, the official said they received reports from their intelligence counterparts from Pa-kistan that a shipment of unauthorized medicines would arrive at the Ninoy Aqino international Airport. “We were alarmed by the products because it came from a supplier [from Pakistan] that has a reputation of exporting counterfeit pharmaceutical products,” he said on Tuesday. The firm coordinated with the iG, headed by Deputy Commis-sioner Jessie Dellosa, who immediately took action and placed the shipment under alert order. “Deputy Commissioner Jessie Dellosa has ordered an in-vestigation already to determine what happened with the counterfeit drugs that despite an alert order, the shipment was smuggled out of the Ninoy Aquino international Airport,” BOC-iG Special Assistant for Operations Major Jovily Carmel Cabading said. The shipment, which arrived on May 1 via Thai airways, con-tained 12 boxes of medicines arrived which were misdeclared as health-care products or food supplements. it was reportedly consigned to Jenelyn Higbok, of El Grande, BF Homes, Parañaque City. The BOC said the im-porter committed several violations, such as misdeclaration and undervaluation.

PrOGrESS on forging a free- trade agreement (FTA) be-tween the Philippines and the

European Union is being hindered by the country’s policies on foreign investments, foreign ownership and intellectual property rights (iPr), the Department of Trade and industry (DTi) said on Tuesday. Trade Secretary Gregory l. Do-mingo said he met with EU Com-missioner for Trade Cecilia Malm-ström in Kuala lumpur two weeks ago and renewed discussions on an EU-Philippines FTA. “We’re ver y interested but they’re still reviewing the case of the Philippines and they’re deter-mining whether we can meet the high ambitions of the EU,” Do-mingo said at the sidelines of the launch of the advocacy papers of the European Union-Philippines Business Network (EU-PBN) in Makati City. The DTi chief cited the EU’s “high standards” on iPr enforcement, en-vironment and labor. Domingo said the primary concern of the EU is the barri-ers to foreign direct investments and ownership enshrined in the Constitution. He said the EU is also keen on the inclusion of trade-related as-pects of intellectual property rights plus (TriPS-plus) provisions in the proposed FTA, which are required in FTAs with large economies such as the US. Tr iPS -plus prov isions are stringent standards governing iPr and are considered more rigid than those laid out in the World Trade Orga n i z at ion’s T r iPS agreement. What would work for the Philip-pines, Domingo said, is the relatively liberalized business environment of the Philippines. “Our retail and banking sectors are open. What’s limited is the production of armaments, pub-lic utilities, mass media, practice professions, very few na lang,” he said. During the Second EU-Philip-pines Business Dialogue on Tuesday, the EU-PBN launched and handed over to the government the group’s First Advocacy Papers. Among the features of the advo-cacy document is the inclusion of the auto sector in the Philippines-EU FTA. Catherine N. Pillas

in the fourth quarter of 2013. Private consumption growth in the first quarter of 2014 was the highest for the entire year. it slowed in the second quarter to 5.7 percent; 5 percent in the third quarter; and 5.1 percent in the last quarter of 2014. The average growth of consump-tion growth last year was 5.4 per-cent, lower than the average of 5.7 percent in 2013. The relative strength of house-hold-consumption growth in 2014 picked up the slack in government spending growth, which only aver-aged 1.8 percent last year. However, Balisacan expects this trend to be reversed in the first quarter of 2015, with government spending making up for the expected slowdown in consumption. “Marami pang na-release na budg-ets last year, may carryover, nai-re-lease ng DBM [Department of Budget and Management] nandun na ’yung mga ahensiya, ’yung spending na. Of course, they won’t be able to spend

everything. But the fact na ang daming carryover from last year, what they are going to mobilize is much more than 2014. We expect government spend-ing to be much better this year than last year,” Balisacan explained. The Philippine economy is largely consumption-driven. The World Bank said consumption will contin-ue to be a major source of economic growth in the country, since it ac-counts 70 percent of the economy. This is the reason the government has been trying to rebalance the coun-try’s economic growth by making the economy more investment-driven. One of the ways by which the government is changing this is by encouraging investments and in-creasing support for Filipino small and medium enterprises (SMEs). Around 90 percent of businesses in the Philippines are considered SMEs. Most of them stay small- and medium-sized throughout the dura-tion of their corporate lives. One of the reasons is the limited

support and resources extended to the development of SMEs. Balisacan said the financing gap for SMEs in China and Southeast Asia amounts to around $100 billion. “Empirical studies have also veri-fied a distinct disadvantage of SMEs in accessing lines of credit, and the continued high reliance on internal funds suggests the persistent un-derdevelopment of SME financing institutions,” Balisacan said. Balisacan added that, for its part, the government has launched pro-grams that seek to develop and con-tinue to support SMEs in the country. These efforts include promoting additional reforms, such as the ra-tionalization of fiscal incentives and amendments to the build-operate- transfer law. “We encourage SMEs to be more aggressive in establishing linkages and building networks with other SMEs and large enterprises, both domestically and internationally,” Balisacan added.

Public spending to boost Q1 growthBy Cai U. Ordinario

Government spending is expected to pick up the projected slack in household

consumption in the first quarter of the year, bolstering hopes that economic growth during the period would remain robust.

commuter woes One of the eight operational trains of the Metro Rail Transit (MRT) is shown traversing Edsa in this photo. The management of MRT started to limit its operation to eight trains from 20 on Monday, affecting thousands of commuters who depend on the MRT to avoid heavy traffic on Edsa, especially during rush hours. ALYSA SALEN

‘Govt policies stall EU-PHL free-trade deal’

Oil firms raise prices

BOC to probe release of counterfeit drugs HONRADO: “Miaa makes

it a point to keep abreast with technology, especially

in terms of security for the airport. With the assumption

that potential threats are also executed in new ways to

breach security, management has to put in place better

safeguards for passengers.”

By Recto Mercene

THE Ninoy Aquino international Airport (Naia) authorities promised departing passengers that there would be less body

frisking once a new set of body scanners are set in place next month. Fourteen eqo portal systems were procured by the Manila international Airport Authority (Miaa) late last year. These are scheduled for delivery in June, the Naia media bureau said. Produced by leading sensor manufacturer Smiths Detection, the eqo system makes use of an advanced millimeter-wave technology, which detects concealed objects on a person’s body. The technology makes use of a low-fre-quency radiation, which is safer than higher-frequency radiation. Among others, the new body scanner can detect ceramics, liquids, metals, narcotics and explosives. A passenger going through the body scanner will simply have to stand inside the open booth of the eqo portal. Scan results will then be shown immediately on the op-erator’s screen indicating the location of concealed items. Without having to be frisked, passengers will be requested to remove items in question. Privacy is also ensured as the system has a mode that will present only the outline of the body. Miaa chief Jose Angel Honrado says that, with the new, advanced scanner, security inside the terminals will be enhanced. Smiths Detection describes the eqo portal system as the “most advanced scanner” in the market. it is also the first to achieve the top performance standard from the European

Naia to use full-body scanners in June

Civil Aviation Conference. “Miaa makes it a point to keep abreast with technology, especially in terms of security for the airport. With the assumption that potential threats are also executed in new ways to breach security, management has to put in place better safeguards for passengers,” Honrado said. Eqo portals will be placed only at the Fi-nal Security Screening Checkpoints of each terminal. Three units will be allocated to Terminal 1; five units to Terminal 2; an-other five units to Terminal 3; and one unit to Terminal 4. There are currently 26 walkthrough metal detectors prior to boarding in all Naia terminals. These only sound off an alarm when metals are detected on a person’s body. These units, however, will not be removed once the eqo portal systems are installed. Bidding for this project began in February 2013, while the contract was awarded to Defense and Protection System (Phil.) inc. in November 2014 for a total bid amount of P149 million.

Wednesday, May 13, 2015

OpinionBusinessMirrorA6

A way forward in the integrated Asean market

editorial

For the first time since the prospect of Asean integration be-came real, we are hearing of a Philippine business group go-ing forward to challenge the foreign competition, instead of timidly shrinking into itself and complaining that it will be no

match to the challenge coming from abroad.

It is reported that the Philippine Franchisers’ Association (PFA), headed by its president, Samie Lim, is looking at Myanmar, Vietnam and Cambodia as new frontiers that Philippine franchisers can tap in extending their market reach. Lim said that these three countries are virgin markets for Philippine business, stressing that “our people should stop looking at New York or other dis-tant markets.”

The PFA has obviously done its duties—scouting the markets and making preparations for them. Lim said that Thai firms are currently invading Myanmar, but that their products are pro-vincial brands and are not as good as Philippine brands. “our brands,” Lim said, “whether food or fashion, will be high-end brands.”

Lim noted, however, that there are no intellectual-property laws as of this time in Myanmar. “The key is to have a partner who can protect you, and not take advantage of you and not use you,” Lim cautioned.

With respect to Vietnam, Lim is excited about franchising prospects in that country. He is visiting Vietnam within the next few weeks.

Lim said that the PFA has pavilions in Indonesia and Dubai. In Indonesia it brought 10 brands. In cooperation with Indonesian partners, it recently held a fashion show of Philippine clothes with Indonesian models.

This attitude of small- and medium-scale industries is in sharp contrast with that of the fran-chisers. The small and medium enterprises (SMEs) are apprehensive that they may not survive the competition of foreign firms. This is despite the obvious fact that if SMEs are succeeding against their bigger competitors in the domestic market, there is no reason they will fail against larger entities from foreign markets.

Still, there is every reason to prepare for the competition. The franchisers are confident in the quality of their products, but most everybody else must look into their production cost. Every-thing else, being equal production cost, will determine who succeeds in the competition. In this regard, the cost of power, among inputs, is extremely relevant. The cost of power in the Philip-pines is notoriously high as compared with that in other countries. The best way to help SMEs is to lower the cost of their power input.

Later, access to financing will be of critical importance to SMEs, as they begin to confront a larger market. relations to banks and other sources of financing must be looked into this early.

We need self-confidence to deal with the competition that is expected to be generated by the coming integration in Asean, but this self-confidence must be built on hard realities—the superiority of our brands and the reasonableness of our costs. Let other businesses be infected by the PFA spirit, and prepare to take advantage of the opportunities that will unfold before us in the days ahead.

Of aging population and saving for retirement

AsiA is now facing an imminent graying of its population which is predicted to be most rapid between 2010 and 2030, based on studies by the Organization for Economic

Cooperation and Development.  in the Philippines an improved national medical plan and increased awareness on wellness programs are making the aged live longer.

Apple could make money by bailing out Greece

ThAT Apple should buy Greece with all the useless cash it has on hand is just a joke that won’t go away. Yet it’s true that, if big American corporations and European politicians had

any imagination, they could probably engineer a bailout for the nearly bankrupt country on terms that would benefit everyone.

All About Social SecuritySusie G. Bugante

in a situation like this, individual pensions and a very reliable and consistent pension-fund system are critical.

But, generally, pensions are usu-ally inadequate because of the rela-tively low coverage by the formal pension systems; the withdrawal of savings before retirement is also common; pension savings are often taken as lump sums; and pensions are not automatically adjusted to changes in the cost of living. 

in the Philippines the social secu-rity system (sss), for instance, oper-ates on a defined-benefit scheme.  This means that benefits, like sickness, maternity, old-age, disability and death pensions, are predetermined

using a formula based on the number of contributions paid and a member’s monthly-salary credit, and not de-pendent on the amount of contribu-tions or investment earnings gener-ated by the sss.  As such, every new member of sss is assured of the type and amount of benefits that could be obtained from the system under certain terms.

Personally, i think that prepar-ing for retirement is an individual cause.  While we rely on the sss and the Government service insurance system, in the case of government employees, i believe we should save money now during our productive years to live comfortable lives in our old age.

Recent ly, the sss star ted accepting applications for its PEsO Fund Program, or Personal Equity savings Option Fund, in 10 pilot areas. As its name suggests, the program speaks of an optional-savings mechanism for sss mem-bers which offers guaranteed earn-ings that are based on prevailing Treasury-bill rates. Members who are no more than 54 years old and have at least six consecutive con-tributions under the sss regular program within the last 12 months prior to enrollment are qualified to join. They may contribute up to a maximum of P100,000 every year. 

Employed members, regardless of the amount of their current monthly contributions, may join the sss PEsO Fund, while self-employed, volun-tary and overseas Filipino workers members should be paying the maxi-mum sss contribution to be able to contribute in the sss PEsO Fund.

For the pilot implementation of the sss-PEsO Fund, the following branches in the National Capital Re-gion are ready to accept applicants: Diliman, Cubao, san Francisco del Monte, Pasig-shaw, Mandaluyong, Taguig, Makati-Gil Puyat, Alabang, Legarda and Pasay-Roxas Boulevard.   By september 2015, all sss branches nationwide will accept applications

to the PEsO Fund.  sss Peso Fund savings are allo-

cated for retirement, medical and general purpose, such as educa-tion, housing, livelihood and un-employment. Only the portions allotted for medical and general purpose may be withdrawn before the member’s date of retirement, subject to penalties if withdraw-als are made before the five-year retention period is over. 

Most people who have worked 30 to 40 years—or practically all their lives—look forward to the time when they can relax and enjoy the fruits of their labor in the company of their loved ones. Many dream of traveling and doing long-forgotten things that they love doing during their retire-ment years. We all want this kind of ideal setup, but the question is, have we prepared for it? have we saved enough for our retirement?

For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.

Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send com-ments about this column to susiebu-gante.bmirror@gmail.com.

Back in 2012, an investor at-tending Apple’s general meeting asked Tim Cook, the CEO, if he’d ever considered using the company’s growing cash stash—$97.6 billion at that point—to acquire Greece. “We’ve looked into many things,” but not that, Cook replied. Of course, entire countries can’t be bought—not even in novels, it seems. in iain Banks’s The Business, such a deal fell through, even though the acquisition target was an obscure himalayan monarchy, not an old democracy like Greece.

so everyone had a laugh and moved on. Things briefly got better for Greece when it received the big-gest bailout in history, and private creditors agreed to a haircut. But its economy still failed to grow, and the country’s debt burden, at 175 per-cent of economic output, remained unsustainable. Apple, in the mean-

time, more than doubled its hoard, which now amounts $194 billion in cash and equivalents. The company has been paying generous dividends and buying back stock, but the cash pile keeps growing. There’s no way to invest it all. For years, Cook has been talking about mind-blowing products his company has in the pipeline, but he’s only managed to come up with incremental improve-ments to existing products, an aver-age streaming music service and an overpriced smartwatch, and these haven’t required much capital. Un-less Apple starts building cars—or perhaps spaceships—it will keep accumulating cash.

As will other big Us companies. Nonfinancial American firms hold $1.73 trillion in cash, 4 percent more than they had a year ago, and $1.1 trillion of that belongs to the 50 biggest companies, according to a

recent report from Moody’s investors service. Apple, Microsoft, Google, Pfizer and Cisco have stockpiled $439 billion.

Most of that money sits over-seas, because, if it were repatriated, it would be subject to a 35-percent Us tax. spending it, or even giving it back to shareholders, is a pain. No one expects the Us to reform its tax system and resolve this issue any-time soon.

so the idea that the top 5 cash hoarders could now save Greece and do better for themselves in the pro-cess is intriguing.

Greece needs about €190 billion ($212 billion) to bring down its debt to the manageable level of 70 percent of gross domestic product. That’s about 48 percent of the five companies’ combined cash stash. For paying down the debt, Greece could reward the firms with a spe-cial deal on corporate taxes, some-what like the one Apple now enjoys in ireland. That sweetheart deal is being investigated by the Europe-an Union and is probably doomed. Yet, Greece’s case is different: The EU, as one of the country’s biggest creditors, might be inclined to make a special dispensation to the American companies for helping solve the Greek problem. The Us might have some objections, but as the biggest shareholder in the international Monetary Fund, it, too, stands to lose money if Greece

defaults, and the destabilization brought on by a Grexit is certainly not in Us interests.

in exchange for less than half of their cash—and just 13 percent more than it would cost to pay Us taxes—the companies would receive an indefinite, ironclad guarantee of low taxes on non-Us operations. Not a bad deal.

Greece, for its part, would get debt relief, plus the companies’ European headquarters. Many ex-ecutives would probably welcome the move to a warm seaside, and Greece would have the beginnings of a powerful tech cluster, which would draw in other companies and create service jobs. With such help, the Greek government could prob-ably afford to be less austere than its creditors want it to be. But it would still need to reform inefficient public services and become more business-friendly, or risk missing out on the obvious benefits of working with the tech titans.

i’m pretty sure this kind of bailout would get the Greek people’s approval if put to a referendum.

All it would take to work it out would be a little flexibility. sadly, that is a quality everyone involved in the Greek crisis today appears to lack. so, instead, Greece will keep stumbling toward bankruptcy, and the American companies will keep accumulating cash they don’t know how to spend.

BLOOMBERG VIEWLeonid Bershidsky

Wednesday, May 13, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

Eulogy–Commissioner Evangeline Crisostomo-Escobillo

With all the dead around us in this hallowed place, it is strange that we are gathered here to celebrate life—the life of our sister, friend and colleague, Commissioner

Evangeline Crisostomo-Escobillo. in many but different ways, at various times and points in our lives, Vangie as a student, a friend, a mother, a relative, a practicing actuary, a bank and insurance executive and an insurance commissioner, had touched our lives.

We shared her joys, suffered her pains, celebrated her triumphs and bore her defeats. And each of us who had the privilege to know her also died a little when we learned of her passing four days ago. May 3 was a day of national mourning for all Filipinos when Manny Pacquiao lost to Mayweather, but to all of us assembled here tonight May 4 was a day of inconsolable grief and immea-surable despair when we lost Vangie.

it was reported that she was the one driving when they met their tragic accident. Yes, that’s Vangie no doubt. For whatever she did, she was always in control and in command. She lived a fast and furious life maybe knowing that her life would be brief—trying to achieve so much in so short a lifetime.

Vladimir Nabocov, the Russian author who wrote the famous novel Lolita once wrote, and i quote: “Our existence is but a brief crack of light be-tween two eternities of darkness.” that

may be so but Vangie’s life is a shin-ing, lasting light that will illumine the insurance world.

i cannot forget her last day in her office at the insurance Commission (iC) on August 10, 2007. She called me at my office in Philam Life around 10:30 a.m. in less than 15 minutes i was seated in front of her across the desk that is now my official desk. then without any preliminaries fully knowing that her term of office was expiring. Vangie asked me: is there anything she can further do on her last day in office? i thought hard and since one raging issue at that time was agent’s misconduct, i suggested that she issue a circular dealing with the market conduct of insurance agents. She asked me if i could draft it and i answered i could if she would give me at least two hours. it was 11 a.m. and she asked me to work on it at the receiving table outside her office and ordered lawyer Denis Cabucos to

join me later to format my draft in iC Circular Form. She left to attend a meeting at the Department of Fi-nance after ordering lunch for me. A couple of hours later she came back and after reading the draft, signed Circular Letter 16-2007 dated Au-gust 10, 2007, her last day in office. it was her last official act in office as the insurance commissioner. Up to the very end, the interest and pro-tection of the policy owners against abusive and erring insurance agents was foremost in her mind.

Vangie loved life and lived it with gusto, daring and passion. idleness was not part of her DNA. She loved action and had an unmatched zest for life. She was bold with her com-mitment, dauntless with her convic-tion and honest with her feelings. She got what it takes to regulate a troubled industry. She had led a full and rich life. She had the integrity to heed the commands of her intellect, the wisdom to listen to the stirrings of her conscience and the courage to follow the dictates of her heart. Up to the very end she was faithful to her profession. insurance was her calling. insurance was her passion. insurance was her love. insurance was her life.

Vangie is not just a person but a force of nature capable of unleashing tremendous energy. She had the time and stamina for everything worth doing, including putting up a party-list two elections ago. i remember meeting her at the Makati Sports Club with my entire family where each one of us signed her petition to register her party-list with the

Commission on Elections. her radius of activities is as extensive as her var-ied interests are encompassing. She is planet Venus spinning an orbit as distant as Pluto’s. if she’s a typhoon, she’s signal No. 3, if an earthquake, she’s intensity 10. No wonder she has restored and nourished AiRDC back to life. if she were gifted with a lon-ger life, we won’t know what else she would have brought back to life. in fact, Dear Vangie, you even brought fun and excitement to the dreary and languid lives of our actuaries as much as you have instilled fear in the hearts of the rascals in our industry.

So she was called many names. She’s tough and strong-willed. But to this i say Vangie was kind and fair to everyone. “She comforted the distressed and distressed the comfort-able.” And to those who say that she is proud and flambouyant, what i can say is that she gave élan to her job. hers was a class act.

thank you Vangie for the friend-ship and the memories. in the ebb and flow of time, that friendship is the only constant between us, and all the people here who love you. it’s the indestructible bond among us all which even death cannot unbind.

All the flowers that decked this hall will wither and die and soon their scent will banish and fade but the blossoms that sprout from your beautiful soul shall linger and stay with us forever. thank you for bringing sunshine and summers to our lives. We lost you this summer, it will all be winter after that.

Good-bye, my dear commissioner.

By The Management Support Services Group of the Insurance Commission

Insurance Commission brings the 2015 Aitri-Toronto Centre Intermediate On-Site and Off-Site Examination Workshop for Insurance Supervisors to the Philippines.

DURiNG the 1999 Summit Meeting of the Association of Southeast Asian Nations (Asean), the insurance regulators from its member-countries came to realize that there is

a disparity on insurance knowledge and expertise among the member-countries. in order to close this gap and level the playing field, restore confidence, regenerate economic growth and promote regional financial stability in the region, the Asean established the Asean insurance training and Research institute (Aitri) in 2000. Since its establishment, the Aitri has provided necessary and accessible avenues to education, training and research geared toward capacity-building for the insurance sector and strengthening regional financial cooperation in the area of human-resource development in the Asean region.

Asean insurers bridging knowledge gap in region

the Malaysian insurance insti-tute (Mii) serves as the secretariat and headquarters of Aitri. Based in Kuala Lumpur, Malaysia, this is where most of the seminars, work-shops and training programs of Aitri are conducted. For this year, the insurance Commission (iC) of the  Philippines, hosted the Aitri-toronto Centre intermediate On-Site and Off-Site Examination Workshop for insurance Supervisors from April 20 to 23 at the Bayleaf hotel, intra-muros, Manila.

iC, together with Aitri and to-ronto Centre, spearheaded the workshop which aims to identify and assess risks in insurance opera-tions, understand how operational management plays a critical role in achieving goals, operational control and risk management, apprehend how insurance companies manage risk and identify effective off-site and on-site strategies for supervi-sory work. the opening of the event was graced by insurance Commis-sioner Emmanuel F. Dooc; Dato Syed Moheeb, CEO of Mii and Aitri; and Deputy insurance Commissioner Dorothy M. Calimag.

through the course of the four-day workshop, Bruce thompson, program director of toronto Centre; Jean Sarazin, chartered accountant and former financial analyst of Of-fice of the Superintendent for Fi-nancial institutions in Canada; and Lonny McPherson, senior financial sector specialist at the Financial Stability institute, shared their knowledge, expertise and technical know-hows to 33 delegates from the Asean countries—the Philip-pines, Malaysia, Brunei Darus-salam, thailand, Singapore, and Cambodia—and other neighbor-ing countries, such as New Zealand and tanzania.

the commencement of the Asean Economic Community (AEC) is fast approaching. in order for the iC to be able to effectively develop and strengthen the Philippine insur-ance industry to enable it to contend head-on with tough competitors from the region once the AEC for-mally commences in 2015, it should also employ mechanisms to equip itself with the requirements of the changing times. the very core and

foundation of the iC—its examiners and insurance specialists—should possess advanced knowledge and competencies at par with global trends and developments for them to carry out their evolving tasks and acclimatize with the transforming landscape on which the insurance industry thrives.

On-site and off-site examination of insurance companies’ financial condition is one of the primary re-sponsibilities of insurance regula-tors and supervisors. it is through this that the regulators are able to know if a company is still solvent enough to pay the claims of its poli-cyholders. Prudent examination of an insurance company’s financial condition is a must to ensure the growth and stability of the country’s insurance industry.

together with other insurance regulators and supervisors in the region, iC continuously endeavors to herald the insurance industry toward its development and fortification. As reverberated in its vision statement, the iC has committed itself to the adherence to and adoption of prac-tices at par with regional and global standards, as far as regulation of the insurance industry is concerned. Equipped with the capacity and knowledge brought by the recently held workshop, the delegates now go forth to contribute in the devel-opment of the Asean insurance mar-ket leading to economic growth and progress in the region.

Emmanuel Dooc

INSURANCE FORUM

BLOOMBERG VIEWWilliam Pesek

thE longer China’s economy stalls, the lonelier Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), is certain to get. there’s simply no playbook for a central

banker facing so many competing challenges: deflation, excessive debt, chaotic global financial markets and vested interests resisting reform. Zhou seems to have little choice but to make things up as he goes along.

China’s baby steps toward economic disaster

But if Zhou is interested in con-sulting a cautionary tale, he might consider the decisions made by policy makers in Japan in 1998, when that country was on the precipice of defla-tion and bore an eerie resemblance

to China’s present situation. (Japan’s deflationary slide was triggered by a massive debt buildup, a greying population and rigid industrial poli-cies; if that sounds familiar to China watchers, it should.) Unfortunately,

Zhou seems committed to repeat-ing the mistakes made by Masaru hayami, the former governor of the Bank of Japan (BOJ).

On Monday, Zhou cut the PBOC’s one-year lending rate by 25 basis points to 5.1 percent, his third cut in six months. that excited China’s stock traders. But, as hayami’s ex-perience shows, incremental moves of this sort aren’t a long-term fix. if Zhou hopes to avoid deflation in Chi-na, he should pay particular atten-tion to three of hayami’s missteps.

First, hayami should have been far more aggressive with monetary stimulus. initially, his problem was sheer denial. two months before he took the helm at the BOJ in 1998, his predecessor Yasuo Matsushita insisted that there was no reason to expect deflation in Japan; hayami operated under the same delusion

after taking office.hayami eventually acknowledged

that deflation was an issue, but even then he wasn’t bold enough. Although hayami is sometimes remembered as the father of quantitative easing (QE), which he pioneered in 2001, his ini-tial attempts at monetary stimulus were far too timid. Part of the reason current BOJ Governor haruhiko Ku-roda is still pumping liquidity into the Japanese economy today is that 14 years ago hayami only lowered rates hesitantly and incrementally. (the US Federal Reserve, by contrast, is preparing an exit strategy from its more ambitious QE program after just six years.)

the second thing hayami should have done—and Zhou should do now—is take toxic assets off bank and local-government balance sheets. For a decade, tokyo underre-

ported the magnitude of its bad-loan problem; as a result, corporate Japan only got serious about writing off bad debt beginning in the early 2000s. if the BOJ had loaded up on distressed assets during hayami’s tenure, Ja-pan’s financial sector might have healed long ago. instead, Japan’s distressed debt festered, its falling price cycle accelerated and its banks refused to extend credit because they suffered from what Kuroda calls a “deflationary mind-set.”

hayami’s third failing was that he was too timid with his bully pulpit. he was right to insist that Japanese deflation was less about the supply of yen than growth-stifling regula-tions, monopolistic behavior and a dearth of policy imagination in the government. But he enabled to-kyo’s political paralysis in ways Zhou would be wise to avoid. hayami, for

example, could have sought a series of quid pro quos: i’ll print more yen, he might have told the government, if you shake up the banking sector, re-duce trade barriers, cut red tape and tweak taxes to encourage innovation.

China can steer clear of these costly mistakes. Zhou could cut rates faster and by bigger increments as China’s deflation risks deepen. the PBOC could start taking loans that are destined to default off the books of big banks and municipalities. And Zhou could leverage his inter-national gravitas to prod President Xi Jinping’s team to international-ize the country’s financial system and foster greater competition in the economy.

But until now Zhou has only initi-ated baby steps, just as hayami did. And there’s no reason to expect the results this time will be any different.

DOOC

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phWednesday, May 13, 2015

Continued from A1

Malampaya supply cut;reasons still not known

Competition bill nears passage

‘ECONOMIC CHA-CHA NEEDS BIGEFFORT TO HURDLE CONGRESS’Speaker Feliciano Belmonte Jr. on Tuesday ad-

mitted that “big effort” is needed to pass his economic Charter-change (Cha-cha) bill in the

House of representatives. Belmonte said at least 197 votes are needed for resolution of Both Houses (rBH) 1, or the economic Cha-cha, to pass the final reading. “We will be able to approve it on second reading in June [before our sine die adjournment], but big effort will be needed during the third reading,” he said in an interview at the sidelines of the weekly Ugnayan sa Batasan news forum. The House of representatives uses viva voce voting for second reading and nominal voting for third reading. Belmonte reiterated that the economic Cha-cha will have a big contribution to economic growth, as foreign direct investments are seen to increase once foreign ownership of estates and corporations, one of the issues raised by investors for not investing in the country, is relaxed. Belmonte added that the government may hold the plebiscite for Cha-cha simultaneous with the 2016 national elections, instead of spending for a separate

referendum, which needs at least p7 billion to p8 billion. “If we don’t have funds for the plebiscite, it is okay for me to conduct the plebiscite for Cha-cha alongside the 2016 presidential elections,” he said, adding that , “the plebiscite is the crucial thing for economic Cha-cha.” according to the Commission on elections, the highest turnout of voting population participating in a particular election is during presidential elections. Moreover, Belmonte said the lower chamber is still the main proponent of the economic Cha-cha, and senators would still wait for the House version. Once it hurdles the third reading, it is only when the upper house would tackle it. Since last year, rBH 1 is still under the period of in-terpellation in the plenary. The resolution, filed by Belmonte and Sen. ralph recto, is eyeing to amend economic provisions on the 60-40 rule that limits foreign ownership of certain ac-tivities in the philippines. The resolution will include the phrase “unless provided by law” in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, me-dia and advertising industries. Jovee Marie N. dela Cruz

FERNANDEZ: “One unit of Ilijan had to

shut down, while five of the six units

of First Gas shifted to liquid fuel to continue

operations. The sixth unit is still running on

natural gas.”

CLOSE to 400 megawatts (MW) of power have been shaved off from the Luzon grid, owing to an

unscheduled shutdown of two power plants that were affected by reduced natu-ral-gas supply from the Malampaya facility.

PPP... Continued from A2

  “An infrastructure project takes about four or five years to com-plete. The plans in the pipeline are good, it’s just that there is a gesta-tion period,” he said. “It would be logical for the next set of leaders to continue on with the program because, as they can see, the ini-tiative is improving.”  His plan now is to push for more projects out of the pipeline as a last push during his stint in the transport agency, which accounts for more than 60 percent of the key infrastructure program’s list of deals.   “Our target is to have this pro-gram beyond 2016. The process in developing infrastructure takes a very long time, say about four to five years, as what I have men-tioned. If the guys who will replace us don’t adopt the program, it will take them two years to study. Then, you’ll have a lull of another four years,” he said. “So what is good is to push these projects out of the pipeline.”  Currently, the government is ten-dering 13 deals, the bulk of which are under the Department of Transpor-tation and Communications. 

  These are the P4-billion Integrat-ed Transport System (ITS) South Terminal; the P110.51-billion De-velopment, Operations and Mainte-nance of New Bohol Panglao Airport (P2.34 billion), Laguindingan Air-port (P14.62 billion), Davao Airport (P40.57 billion), Bacolod Airport (P20.26 billion) and Iloilo Airport (P30.4 billion); the P18.99-billion Davao Sasa Port Modernization Project; the Operations and Main-tenance of the Light Rail Transit Line 2; the P122.8-billion Laguna Lakeshore Expressway-Dike; the P55.1-billion Cavite-Laguna Ex-pressway; the P18.72-billion New Centennial Water Supply Source; the P24.5-billion Bulacan Bulk Wa-ter Supply; and the P50.18-billion Regional Prison Facilities through PPP Project.   “It will be ill advised if they don’t tap PPP. I take it as a moral obli-gation to brief thoroughly those who will replace us, so they hit the ground running and have a smooth ride ahead,” Abaya said. “We have a better regulatory environment and encourage the next adminis-tration to be equally strict, if not better regulators.”

  The infrastructure woes of the Philippines—at least, in Metro Manila—cannot be solved in just one administration. Hence, continuing the best practices of the previous government is one of the best solutions to this prob-lem. The challenge for the next administration does not only lie on sustaining the PPP Program, but also on maintaining a higher budget for infrastructure. “PPPs are not necessarily a panacea. The reality is not every project is going to be a successful PPP. So it is important to have a very realistic view of the proj-ects,” Macquarie’s Walker noted.  Underspending, after all, is the root cause of all these problems in infrastructure. James Lopez, the 24-year-old tech specialist who endures daily horrors commut-ing to and from work, might just have to wait a bit longer before his train ride to work becomes better. Relief will come, the government promised. But as to when that relief will come is also the question that the next set of leaders should be ready to answer. 

Malampaya, which accounts for 40 percent of the Luzon grid’s re-quirements, supplies natural-gas to the 1,000-MW Santa Rita and the 500-MW San Lorenzo natural-gas plants of First Gas, a subsidiary of the Lopez’s First Gen Corp. Besides the two plants, Kepco Philippines Inc.’s 1,200-MW Ilijan combined-cycle plant also runs on natural gas supplied by Malampaya. According to an official of the Ma-nila Electric Co. (Meralco), Malam-paya has reduced natural-gas supply to Ilijan and the power plants owned by First Gas. As a result, the Unit 2 of Ilijan went offline. Ilijan Unit 2 can generate 200 MW of power. “One unit of Ilijan had to shut down, while five of the six units of First Gas shifted to liquid fuel to

on Sunday, but no details on what happened. We were advised that sup-ply may begin normalizing tonight,” Fernandez said on Tuesday. Aside from the gas constriction, one unit of South Luzon Thermal Energy Corp.’s (SLTEC) coal-power plant in Batangas and another unit of Panasia Energy Holding’s Limay power plant in Bataan went offline for unknown reasons. “Due to Malampaya constric-tion, yes,” Fernandez said, when asked how many megawatts were shaved off from the grid. “However, aside from the constriction, one unit of SLTEC was shut down yes-terday [Monday], while one unit of Limay was shut down today [Tues-day], both unplanned.” SLTEC, a joint venture between AC Energy Holdings Inc. and Trans-Asia Oil and Development Corp., recently switched on the first unit of its 2x135-MW coal-fired power plant in Calaca, Batangas. The second 135-MW unit of the plant is currently under con-struction, and is expected to be com-pleted by the end of the year. AC En-ergy is the power arm of Ayala Corp. Panasia Energy, meanwhile,

operates the 620-MW Limay power plant in Bataan. Panasia is owned by Millennium Energy Inc. Despite the gas constraint and the unscheduled shutdown, power supply in Luzon remained normal. “There has been no declaration by NGCP [National Grid Corp. of the Philippines] of any yellow alert, and the supply situation has remained normal,” the Meralco official said. Meralco, however, is worried that generation charge may spike owing to the Malampaya incident. “We are con-cerned that spot-market prices may react to the Malampaya constriction.” Gross reserve in Luzon was antici-pated to reach 1,584 MW for May 12 and 1,510 MW for May 13. A yellow alert means contingency reserves are below the minimum level set by the regulator, but does not necessarily mean power outages or blackouts loom. A yellow alert could turn red, and power outages would occur when reserves fall. The ideal buffer is at least 647 MW. When power reserves dwindle and fall below 647 MW, which is the largest running power-generating unit, a yellow alert is is-sued by NGCP.

continue operations. The sixth unit is still running on natural gas,” said Lawrence Fernandez, Meralco Util-ity Economics head. There was no reply from the Malampaya consortium, when asked for the reason of the supply constraint. “We learned about the constriction

“The Senate already approved its ver-sion, so the next step is the bicameral conference. We may conduct the bicam in June,” he said. “We tried to satisfy as many congressmen as we could without watering down this version.” The bill aims to minimize, if not totally eradicate, unfair competition, monopo-lies and cartels. earlier, the Joint Foreign Chambers (JFC) and philippine business groups have repeatedly urged the leadership of the House of representatives to pri-oritize the passage of several economic measures, including the proposed phil-ippine Fair Competition act. The measure defines monopoly as a form of market structure in which one entity, having earned a privilege or obtained advantage over the others, controls the sale of a good or service. as defined under the measure, mergers are situations where two or more entities, previously independent of one another, join together. These include transactions, whereby two entities combine into one; one entity takes control of the whole or part of another; two or more entities acquire control over another entity and other transaction, whereby one or more un-dertakings acquire control over one or more entities.

The bill also proposes to create the philippine Competition Commission (pCC), which will prosecute those en-gaged in unfair and deceptive trade practices and other such practices with the purpose of preventing, restricting or distorting competition. Further, the bill provides for a “tran-sitional clause” to allow affected par-ties time to renegotiate agreements or restructure their business to comply with the law. according to the mea-sure, the pCC is an independent body which shall have original and exclusive jurisdiction to enforce and implement the competition law. Likewise, the bill said the pCC is em-powered to investigate violations of the competition law, issue subpoena duces tecum and testificandum; cease and desist orders; conduct administrative proceedings; impose administrative fines; issue advisory or legal opnions; and is mandated to submit reports to Congress, including proposed legisla-tion for the regulation of commerce, trade and industry. Under the bill, any person who fails or neglects to comply with any term or condition of a binding ruling, a cease and desist order or an order for readjustment issued by the commis-sion, shall pay a fine of not less than p50,000 and not more p2 million for each violation.