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THE local financial system remained well funded and stable in the first six months

no matter the significant changes in the economic landscape arising from global events during the period.

In a report published at its web site on Wednesday, the Bangko Sen-tral ng Pilipinas (BSP) reported that the Philippine financial system—spearheaded by the local banking sector—“remains in a position of strength in the first half of 2015, amid structural shifts in the global and domestic financial landscape.” The central bank said this strength is best reflected by the banking system’s stable funding

profile, continued expansion of resources and upbeat outlook on loans and investments. The banking system’s funding profile remained stable as retail- and domestic-oriented deposit liabilities continued to be the main source of bank funds.

Total deposit liabilities showed a 9-percent expansion in the first half of the year. Although the cen-tral bank said this funding base was stable enough, this represented slower growth from more robust per-formance at end-2013 on account of more alternative investment prod-ucts like variable universal life-insur-ance policies in the market with more competitive rates than deposits.

In a resolution dated October 20, but was made public 15 days later, ERC commissioners ruled that there would be a mandatory imple-mentation of the CSP, which seeks to curb negotiated power-supply agreements (PSAs) between a dis-tribution unit (DU) and a power producer. The resolution takes ef-fect upon publication, which the ERC expects within the week. DOE Circular 2015-06-008  mandates all  DUs and electric cooperatives (ECs) to bid out their power requirements. “The CSP requirement herein mandated shall not apply to PSAs already filed with the ERC as of the effectivity of this resolution. For PSAs already executed but are not yet filed, or for those that are still in the process of negotiation, the concerned DUs are directed to comply with the CSP requirement

www.businessmirror.com.ph ■�Thursday 18, 2014 Vol. 10 No. 40 P. | | 7 DAYS A WEEK■�Thursday, November 5, 2015 Vol. 11 No. 28

A broader look at today’s businessBusinessMirrorBusinessMirrorTHREETIME

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

ROTARY CLUB

JOURNALISM

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S “B,” A

PESO EXCHANGE RATES ■ US 46.7980 ■ JAPAN 0.3869 ■ UK 72.2093 ■ HK 6.0384 ■ CHINA 7.3853 ■ SINGAPORE 33.5349 ■ AUSTRALIA 33.5831 ■ EU 51.3234 ■ SAUDI ARABIA 12.4792 Source: BSP (4 November 2015)

ERC to start implementingpolicy on bidding of PSAs

INSIDE

REELING:IN ANY SEASON,

THERE IS A IN ANY SEASON,

THERE IS A IN ANY SEASON,

PART 2 »D3

D1

Life � ursday, November 5, 2015

Life BusinessMirror

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

DDEAR Lord, make us believe when You say, “Amen, EAR Lord, make us believe when You say, “Amen, EAR Lord, make us believe when You say, “Amen, amen, I say to you, no one can enter the Kingdom amen, I say to you, no one can enter the Kingdom of God without being born of water and Spirit. of God without being born of water and Spirit.

What is born of flesh is flesh and what is born of spirit What is born of flesh is flesh and what is born of spirit is spirit. Do not be amazed that I told you. ‘You must be is spirit. Do not be amazed that I told you. ‘You must be born from above.’ The wind blows where it wills, and you born from above.’ The wind blows where it wills, and you can hear the sound it makes, but you do not know where can hear the sound it makes, but you do not know where it comes from or where it goes; so it is with everyone it comes from or where it goes; so it is with everyone who is born of the Spirit. (John 3:5-8)” May the spirit )” May the spirit John 3:5-8)” May the spirit John 3:5-8regenerates us all the days of our lives. Amen.

� e spirit regenerates us

THINGS THE HOLY SPIRIT DOES, GEMMA AND LOUIE M. LACSONTHINGS THE HOLY SPIRIT DOES, GEMMA AND LOUIE M. LACSONWord&Life Publications • teacherlouie1965@yahoo.comteacherlouie1965@yahoo.com

A POCKET of Quebec City in Quebec, Canada, during the winter season .

B E C | Detroit Free Press

QUEBEC CITY—Shop windows are dominated by winter parkas. A cool, bitter wind blows off the Saint Lawrence River. The treesare turning quickly now.

On Fabrique Street, I hurry past a fur store with my inadequate raincoat and fleece, wishing I had a hood. Or gloves. Or both. In this brief season, fall, North America’s most European city glows with brisk vitality. It has broad shoulders and French-Canadian sturdiness. City hall is decorated with giant pumpkins. Spindly geraniums are on their last legs in the flower pots. Cruise ships on color tours of Canada dock at the port, and visitors pour into the winding streets of the lower town.

Most Americans have been to Toronto, or maybe Vancouver or even Montreal. But Quebec City is far different than those large metropolises. Here, everything is about New France, North America’s French ties, both the past and present. And that sensibility is why Quebec City is also regularly named one of the most romantic cities in the world.

BRIGHT LIGHTSTHIS time of year, it gets dark earlier each day. Already at 2:45 in the afternoon, I feel the hint of winter to come, and how Quebec fights the darkness. I walk uphill toward the windswept river. I cut through a small alley that doubles as a market. There, artists sell touristy images in oil, acrylic and watercolor, all reds and greens and bright blues. There is a gay feeling of warm color and light in this tiny alley. Nearby, Saint Louis Street also is full of bright colors—on the shutters, awnings, and in shop window displays—that soften forbidding gray stone and chilly blue skies.

Inside the luxurious Fairmont Chateau Frontenac hotel, the tradition of afternoon tea is another good insulator against the clutches of winter-in-waiting. There, a waiter serves a gleaming silver pot of steaming tea along with precise little appetizers. The room is hushed. It is warm in here. Couples linger. Nothing is rushed. It feels like a warm blanket, sitting in this room with its wide windows.

PAST IS PRESENTONE thing about Quebec City. Yes, the

language is all French. But this place feels curiously familiar to Americans. Many places in the United States, including Detroit, were once part of Quebec and New France, right up until the French lost their vast holdings to the British in 1763.

Even today, freighters you see on the Saint Lawrence River likely have come from the Great Lakes, connected by a ribbon of water. Many names in Michigan (including Detroit, “the straits”) still resonate of French Canada.

Quebec City still lives amid history. Madame Cadillac herself could walk down the street and feel at home.

A heavy defensive stone wall still marches around the old town, black canons lining the ramparts. (Actually, at this moment they appear to be trained directly on the white Caribbean Princess cruise ship docked below, so watch out, cruise passengers.)

Even the stone house that belonged to 16th-century explorer Louis Joliet is pragmatically used as the ticket booth for the funicular hillside tram that connects the upper town to the lower town.

WINTER FUNLAST winter saw record-breaking cold in Quebec City, with an average daytime high of 17.8 degrees Fahrenheit in February. Still, people came to the Christmas markets and Winter Carnival.

This year, the Christmas markets will run from late November through early January The big Quebec New Year’s Eve festival will feature outdoor shows, lights and a Ferris wheel (December 31). Winter Carnival, Quebec’s most famous event, runs from January 29 to February 14. Other romantic things to do? Rent a car and drive just north of town to Montmorency Falls, a huge waterfall tallerthan Niagara.

Keep going on to Sainte Anne cathedral in the town of Sainte Anne de Beaupre, North America’s biggest Catholic shrine. You also can travel 2 1/2 hours south from Quebec City to visit its big sister, Montreal.

But in my opinion, couples seeking a getaway should just come here, stay put, wander the streets, eat lots of terribly rich food and find a cozy place to stay.

Bring a winter coat, yes. But I am also sure you will think of other ways to keep warm. ■

The warm heart of Quebec City

‘TAKE 5’ TO FAB RATES AND FREEBIES AS Eastwood Richmonde Hotel celebrates its fifth anniversary this month, guests are invited to “Take 5” and enjoy fabulous rates and freebies.

From November 14 to 23, relax and take it easy with a splendid stay in plush comforts at the special discounted rates of P5,000 net for a Superior Room and P5,500 net for a Deluxe Room, complete with buffet breakfast for two, Wi-Fi access, and 5-percent discount on various hotel services during the stay, from Room Service and regular F&B orders, to all telephone calls and laundry service.

Guests can also drop by anytime at Eastwood Richmonde’s café and lounge the whole month of November to take a break and savor delectable dishes and freshly baked pastries with superb treats on the house. Bring family, friends and colleagues for lunch or dinner and for every five orders of entrées from the à la carte menu, get your choice of five non-alcoholic drinks free. Make business lunch meetings easy, satisfying and affordable with the Executive Meal, and for every five orders, get the lowest-priced item free.

These and other freebies await guests who do a “Take 5” at Eastwood Richmonde Hotel (www.richmondehotels.com.ph) in Eastwood City, Bagumbayan, Quezon City.ph) in Eastwood City, Bagumbayan, Quezon City.ph

DELUXE ROOM with an expansive view of the cityscape.

SportsSportsBusinessMirror C1 | THURSDAY, NOVEMBER 5, 2015mirror_sports@yahoo.com.ph

sports@businessmirror.com.phEditor: Jun Lomibao

MOVING ALONGWITHOUT TIGER

The top 3 players—Jason Day, Jordan Spieth and Rory McIlroy—are all in their 20s

and hail from three continents. Players in their 20s won three majors for the second straight

year. That had occurred only twice in the previous four

decades, and one of those years was 2000 when a 24-year-old

Tiger Woods won three majors.

B D F�e Associated Press

SHANGHAI—Jordan Spieth wore a black tunic with red trim around the collar to take part in a Chinese drum ceremony late Tuesday afternoon just as the Shanghai skyline began to glow with lights behind him and three other top players.

This was the traditional photo opportunity to kick off the HSBC Champions. One observer noted that Spieth had not dressed like that since graduation, which for him was only four years ago—from high school.

The landscape in golf is changing quicker than the rapid beat of those Chinese drums.

One year ago, Spieth wasn’t even in the top 10 in the world and had only one win as a pro. Since then, the 22-year-old Texan has won seven times around the world, including the Masters and the US Open, along with a Tour Championship that capped a record $22-million year. He is looked upon as the future of American golf.

At least for now.Also on the stage with Spieth was 26-year-old

Rickie Fowler, who is coming off a big year of his own. Fowler won three times, the biggest at The Players Championship where he delivered perhaps the greatest finish of the season when he made three birdies on the

island-green 17th to win a tension-filled playoff.Jason Day couldn’t make it to China. The 27-year-old

Australian is home awaiting the birth of his second child. And the drum beat had to go on without 26-year-old Rory McIlroy, who was coping with a stomach ailment.

Not to be overlooked are the three winners of Not to be overlooked are the three winners of the new Professional Golfers’ Association (PGA) Tour the new Professional Golfers’ Association (PGA) Tour season—Emiliano Grillo (23), Smylie Kaufman (23) and season—Emiliano Grillo (23), Smylie Kaufman (23) and Justin Thomas (22).Justin Thomas (22).

That explains why PGA Tour That explains why PGA Tour Commissioner Tim Finchem sounded at Commissioner Tim Finchem sounded at ease when asked on Monday about golf ease when asked on Monday about golf moving along without Tiger Woods.moving along without Tiger Woods.

“We are headed for a long “We are headed for a long period of parity with a lot period of parity with a lot of stars being developed,” of stars being developed,” Finchem said at the HSBC Finchem said at the HSBC Golf Business Forum. “And Golf Business Forum. “And in today’s world, you in today’s world, you can become a can become a star in a hurry. star in a hurry. It’s a great It’s a great thing. The thing. The professional professional game is in game is in exceptionally exceptionally

good shape. But I think the next 10 years are the most exciting we’ll ever see to this point.”

It sure seems that way.The top 3 players—Day, Spieth and McIlroy—are

all in their 20s and hail from three continents. Players in their 20s won three majors for the second straight in their 20s won three majors for the second straight year. That had occurred only twice in the previous four decades, and one of those years was 2000 when a 24-year-old Woods won three majors.

Woods had another back procedure last week—that’s three in the last 20 months—for another

clear sign that his time is about up, if it isn’t already.But leave it to Spieth, with his wise head on such

young shoulders, to preach patience and perspective.A new era in golf?“I think it’s a bit soon,” Spieth said. “For Rory, it’s

different because it’s been consistent for years now. Jason different because it’s been consistent for years now. Jason and I, we’ve played solid golf the last few years. In order and I, we’ve played solid golf the last few years. In order to create an era, you almost need a decade of years like to create an era, you almost need a decade of years like this. Sure, we have the potential to do it. But this was this. Sure, we have the potential to do it. But this was the first year of it. But unless we keep our heads down...the first year of it. But unless we keep our heads down...

unless we’re aware of it, and it drives us, and unless we’re aware of it, and it drives us, and we get the right breaks, there’s a lot we get the right breaks, there’s a lot

of factors. So maybe of factors. So maybe it’s a big premature it’s a big premature

to say that.“But,” he

added, “I added, “I believe believe

there there was a was a step step needneed-ed in ed in

the right direction, the right direction, and it took place this and it took place this year. If we can ride year. If we can ride

with that, it will be significant.”Spieth looks at this as a new year, and the World

Golf Championship that starts on Thursday at Sheshan International is his first event of a new PGA Tour season. McIlroy, still catching up from the two months he missed this summer from an ankle injury, is wrapping up another Race to Dubai title the rest of the month.

The beauty of having a cast of stars so young, as Fowler noted, is that they can battle each other for the next 10 or 15 years.

Then again, maybe the conversation might include a different list—or a longer list—of players at this time next year.

That seems improbable now, but consider where golf was a year ago. McIlroy was No. 1 and the only debate was which player was best suited to challenge him. McIlroy now is No. 3, and the list is growing.

“The top 5 in the world ranking, we’ve seen now in the last two years how much that changed,” Spieth said.

At the end of 2013, the top 5 included Woods, Adam Scott and Phil Mickelson. Spieth suspects things will stay in motion.

“I believe we’ll all battle it out,” he said. “But to battle it out on highest stages and to stay up in the ranking and all that...it can happen. But it’s going to take more than just this year.”

PARTY! PARTY!KANSAS CITY, Missouri—The world champion Kansas City Royals basked in ANSAS CITY, Missouri—The world champion Kansas City Royals basked in

the adulation of hundreds of thousands of ecstatic fans in a parade and the adulation of hundreds of thousands of ecstatic fans in a parade and rally on Tuesday that nearly shut down downtown for hours.

After driving a 3.7-kilometer route in a caravan, team owner David Glass, After driving a 3.7-kilometer route in a caravan, team owner David Glass, Manager Ned Yost and several of the Royals returned the love by telling fans they Manager Ned Yost and several of the Royals returned the love by telling fans they could not have captured the World Series without their support and calling the could not have captured the World Series without their support and calling the turnout for Tuesday’s celebration “unbelievable” and “amazing.”

City officials estimated on Tuesday that 500,000 people attended the events.City officials estimated on Tuesday that 500,000 people attended the events.“This is a day like none of us have seen before and we appreciate it from the “This is a day like none of us have seen before and we appreciate it from the

bottom of our hearts,” Yost said. “What [the team] wanted most was to come to bottom of our hearts,” Yost said. “What [the team] wanted most was to come to this city to win a championship for you guys. We celebrate it with you today.”this city to win a championship for you guys. We celebrate it with you today.”

Left fielder Alex Gordon, who has been with the team since 2007, recalled Left fielder Alex Gordon, who has been with the team since 2007, recalled years of losing seasons for the baseball teams. “To see this unfold to this is unbelievable. We’re the World Series champs and you are the best fans in the unbelievable. We’re the World Series champs and you are the best fans in the world,” he told the crowd.

Johnny Gomes, a midseason acquisition from the Atlanta Braves who didn’t Johnny Gomes, a midseason acquisition from the Atlanta Braves who didn’t make the playoff roster but was credited with bringing positive energy to the make the playoff roster but was credited with bringing positive energy to the clubhouse, was the most animated of the players, forcing the reluctant relieving clubhouse, was the most animated of the players, forcing the reluctant relieving corps to take a bow and introducing several players. He also asked for a moment corps to take a bow and introducing several players. He also asked for a moment of silence in honor of Edinson Volquez’s father, Chris Young’s father and Mike of silence in honor of Edinson Volquez’s father, Chris Young’s father and Mike Moustakas’s mother, all of whom died this year.

“It’s unbelievable what those guys did,” Gomes said, emphatically.

Volquez drew loud applause when he vowed that the Royals would be back on the Volquez drew loud applause when he vowed that the Royals would be back on the same stage next season after winning another world championship.same stage next season after winning another world championship.

Fans began arriving hours before the festivities and were packed in so tightly that Fans began arriving hours before the festivities and were packed in so tightly that many could not move. Yet the mood remained mostly jovial, with people waving flags, many could not move. Yet the mood remained mostly jovial, with people waving flags,

hats and signs, thrilled for their team’s first World Series win since 1985.hats and signs, thrilled for their team’s first World Series win since 1985. Hall of Famer George Brett told the crowd this year’s team was better than the one he Hall of Famer George Brett told the crowd this year’s team was better than the one he

played on in 1985. “These guys are the best team ever, in my opinion, and I’m sure in yours too,” he said. “These guys are the best team ever, in my opinion, and I’m sure in yours too,” he said. Several area school districts called off classes for the day and Rachel Bryant, of Kansas Several area school districts called off classes for the day and Rachel Bryant, of Kansas City, took advantage and brought her 7-year-old son, Jayden, to the parade.City, took advantage and brought her 7-year-old son, Jayden, to the parade. “It’s been 30 years since the last championship. Who knows if it will be another 30 “It’s been 30 years since the last championship. Who knows if it will be another 30 years? It might be a one-time experience for him. I hope not; I hope we’re back here next years? It might be a one-time experience for him. I hope not; I hope we’re back here next year,” she said. Steve Templeton, of suburban Lee’s Summit, said the championship brought the Steve Templeton, of suburban Lee’s Summit, said the championship brought the city together. “The Royals were a doormat for so long and look at it now, it’s just a sea of blue,” he said. “The Royals were a doormat for so long and look at it now, it’s just a sea of blue,” he said. “It’s fun because they are bringing everybody together, every nationality, every kind of “It’s fun because they are bringing everybody together, every nationality, every kind of person is here together because we love the team.”person is here together because we love the team.” Downtown was so crowded that some fans who came for the festivities left before they Downtown was so crowded that some fans who came for the festivities left before they began, realizing they wouldn’t be able to see or hear anything.began, realizing they wouldn’t be able to see or hear anything. The Kansas City Transit Authority said those trying to take public transportation to the The Kansas City Transit Authority said those trying to take public transportation to the

events endured waits of one to three hours. events endured waits of one to three hours. AP

HENRIK SIK STENSON (from left), Rickie Fowler, Jordan Spieth and Bubba Watson take part in a traditional Chinese drum ceremony in Shanghai on Tuesday. take part in a traditional Chinese drum ceremony in Shanghai on Tuesday. AP

ROYALS Manager Ned Yost holds the World Series trophy during a victory parade in Kansas City on Tuesday. AP

THE WARM HEART OF QUEBEC CITY

MOVING ALONG WITHOUT TIGER

BusinessMirrorMEDIA PARTNER

TAIWANESE, CHINESE PRESIDENTS TO MEET FOR 1ST TIME SINCE 1949

LIFE D1

SPORTS C1

Banks stable amid shiftsin global financial scene

THIS combination of file photos shows Taiwanese President Ma Ying-jeou (left) and Chinese President Xi Jinping. Ma and Xi will meet on November 7 in Singapore for the first time since civil war divided their lands 66 years ago, their governments said on Wednesday. AP/FILE

HEALTH&FITNESS

THE presidents of China and Taiwan will meet this weekend for the first time since civil war divided their lands 66 years ago,

their governments said on Wednesday—a highly symbolic move that reflects quickly improving re-lations between the formerly bitter Cold War foes.

The meeting on Saturday in Singapore between Chinese President Xi Jinping and his Taiwanese counterpart Ma Ying-jeou could be China’s last to press its case for closer economic and, ultimately, political ties, before Taiwan elects a new president and legislature in January that could put the brakes on Ma’s pro-China initiatives. For Ma’s ruling Nationalists, who have been lag-ging at the polls, it could boost their credentials for driving progress in relations with China, but also car-ries the risk of appearing too close to Beijing, further damaging their chances with skeptical voters.

Presidents of the two sides have not met since Chi-ang Kai-shek’s Nationalists lost the Chinese civil war to Mao Zedong’s Communists and the Nationalists rebased in Taiwan 160 kilometers (100 miles) away in 1949. The two sides have been separately ruled since then, with Taiwan evolving into a freewheeling democracy. China insists that the two sides eventu-ally reunite, by force if necessary.

Confirmation of the meeting from Chinese Cabinet’s Taiwan Affairs Office came hours after the Taiwanese side announced the meeting earlier on Wednesday.

The two would be meeting in their capacity as

“leaders of the two sides” of the Taiwan Strait, office director Zhang Zhijun was quoted as saying in a news release posted on the office’s web site. That appeared to afford them equal status, possibly an effort to blunt criticism from the pro-independence opposi-tion in Taiwan who accuse Ma’s Nationalist Party of pandering to China’s ruling Communists. “This is a pragmatic arrangement under the situation of the irresolution of cross-strait politi-cal differences on the basis of the one-China prin-ciple,” Zhang said, a reference to Beijing’s insistence that Taiwan and the mainland are part of a single Chinese nation. The two sides never talked formally until Ma, president since 2008, set aside old hostilities to allow lower-level official meetings. China and Taiwan have signed 23 deals covering mainly trade, transit and investment; binding Taiwan closer to its top trading partner and the world’s second-largest economy. Taiwanese Presidential Spokesman Charles Chen said in a statement on Wednesday that the two would exchange ideas about relations but not sign any deals.

The choice of Singapore as venue was signifi-cant, because the Southeast Asian city-state with an ethnic Chinese majority population has strong relations with both Taiwan and China and serves as neutral ground.  Singapore hosted breakthrough talks between unofficial Taiwanese and Chinese negotiators in 1992 that established a formula whereby they

C A

B L L 

THERE is no stopping the Energy Re-gulatory Commission (ERC) from implementing the Department of

Energy’s (DOE) Competitive Selection Process (CSP) scheme, a controversial power-industry reform policy meant to ensure supply is bought and passed on to consumers at the least possible cost.

before their PSA applications will be accepted by the ERC,” the ERC’s five-page resolution stated.  In a phone interview, ERC Chairman Jose Vicente B. Salazar said the bidding would be con-ducted by the generation com-pany (genco), which is produc-ing the power, instead of a third party, as prescribed in the DOE policy. “Whether it’s a third-party aggregator or a third-party auc-tioneer, we did not decide on that because we believe that the process can be undertaken by the gencos for as long as they follow our rules,” Salazar said.  The conduct of an auction by a third party is one of the contentious issues hounding the DOE policy. It is opposed by many industry stake-holders, particularly the Manila Elec-tric Co. (Meralco), which also wants

BusinessMirror news@businessmirror.com.ph Thursday, November 5, 2015 A2

NewsERC to start implementing policy on bidding of PSAs

Taiwanese, Chinese presidents to meet for 1st time since 1949

acknowledge that there is only one China, of which Taiwan is a part, but differ on the exact interpretation. Although Beijing in-sists on the so-called 1992 consensus as the basis for talks, Taiwan’s main opposition Democratic Progressive Party has refused to embrace it, calling it meaningless and unrepresentative of popular sentiment on the island. Ma is stepping down as president next year after his maximum two terms, and the DPP’s candidate Tsai Ing-wen is considered the front-

runner to replace him. A DPP victory could prompt a sweeping reassessment of its Tai-wan polices by Beijing, which has hoped that economic inducements would lead to greater acceptance of eventual political unification. Ma’s government has come under in-creasing criticism at home for cozying up to China, amid fears Beijing will eventually leverage economic relations to exert more power over the island. Such sentiments helped the DPP to a land-slide victory a year ago in local elections, rais-ing the possibility it might win not only the presidency but also a majority in legislative

elections also being held on January 16. Given the chances of a Nationalist defeat, China is likely to proceed cautiously to avoid further alienating Taiwanese voters. Xi warned Taiwan in 2013 against putting off political differences from generation to generation. China has long advocated a Hong Kong-style one-country, two-system form of joint rule, in which Beijing controls Taiwan but the island of 23 million retains control of its political, legal and economic affairs. That approach has little currency in Tai-wan, where most favor the current state of de-facto independence.AP

a voluntary implementation of the CSP. The CSP aims to make transparent the manner by which DUs buy electricity from power generators.  Under the resolution, a DU may execute a PSA with a genco only after successfully complying with the require-ments of the process. The requirement is for a DU to openly call for and receive at least two qualified bids from gencos wth which the DU is not barred from entering into a contract for power supply. The CSP further requires that direct negotiations with other power suppliers may be entered into only after at least two failed CSPs. Once the implementation of the CSP be-gins, the ERC will no longer allow the filing by DUs of applications for PSA approval without compliance with the CSP requirements. Salazar said the resolution “removes all uncertainties on how the CSP will be imple-mented by the ERC and paves the way for a re-gime of greater transparency and competition in the power-supply procurement  processes in the industry.” The ERC chairman also clarified

that the commission complied with the 120-day rule stated in the DOE circular for the ERC to come out with the implementing guidelines (IG). However, instead of guidelines, the ERC deemed it wise to issue a resolution. “We complied with the prescribed period under the circular. But we agreed on the for-mulation of a resolution instead of a joint IG with the DOE. We signed the resolution on October 20, but we were caught up with the holidays and the appointment of a new DOE secretary.  The policy-making arm of the government is still the DOE, but the imple-menting arm is the ERC. So this is something within the mandate of the ERC,” said Salazar, when asked why the ERC issued a resolution instead of IG as stated in the DOE circular. Former Energy Secretary Carlos Jericho L. Petilla said the third-party group is envi-sioned to be the extension of ERC’s arm to ensure the CSP’s implementation is fair and that real competition will take place. “This will now ensure the ERC that PSAs are opti-mally priced. I’m not sure how the ERC will look at the results of the CSP if the bidders the ones who conduct the CSP.”

As of press time, Meralco has yet to issue its comment. Other industry stakeholders were also not available for comment. Recent-ly, Meralco Chairman Manuel V. Pangilinan said the CSP is “illogical,” as power gencos have the upperhand since they can opt—or not—to participate in the auction, leaving only a few that are qualified to serve the power requirements of the DUs and ECs. “It’s seductively simple when they por-tray it as they promote lower price. We think it will create precisely the oppo-site. But it is illogical if you think about it because you shifted the power to price over to the gencos and we’ve seen what happened in December 2013, when power spiked,” Pangilinan said. The Meralco official was referring to the 2013 incident when Meralco’s rates shoot up by   P4.15 per kWh for December 2013 and P5.30 per kWh for January 2014 because it had to source power from the Wholesale Electricity Spot Market (WESM), the country’s electric-ity spot market, where distributors, such as Meralco, buy their power supply from gencos. At that time, gencos were accused of col-

lusion when they did not fully offer their output in the WESM. Eleven companies that operate 12 power plants allegedly breached the must-offer rule during the October 25 to December 25, 2013 supply month when power prices shoot up. Meralco, however, was unable to pass on to consumers the P4.15-per-kWh increase in power rates in December due to the Supreme Court issuance of a restraining order, which remains in effect until today. The P5.30-per-kWh rate increase for Janu-ary, however, was recalculated as a  result of the decision of the ERC to void the WESM charges for the November and December billing months. Commenting on this incident, Pangilinan said: “The ability to price should be with the DUs because they are the last mile to the customers.”He explained that that DUs are already under obligation to obtain the least power cost for their customers. “We are under obligation to serve electricity to our customers and we don’t make money out of it. The market power should decide with the DUs, which are obligated by law to find the least cost. But if you are a power-generation

firm then you are not under that obligation,” Pangilinan said. Aboitiz Power Corp., another DU, said earlier that imposing “a one size fits all” policy is not the solution. “Each DU has its own issues,” he said, adding that the government should instead “make sure the process happens and give DUs the freedom to make their own deci-sion. After all, they are answerable to their consuming public and to the ERC.” AboitizPower and Meralco are in favor of a voluntary implementation of the CSP. Gencos, on the other hand, are in favor of the CSP. SMC Global Power Chairman Ramon S. Ang, in a separate interview, supports the CSP.  “We will bid and supply power to every-body. That will be good for the consumers.” AC Energy Holdings Inc. of the Ayala group, on the other hand, said the CSP is no different from the public-private partnership program of the government. “We are obviously in fa-vor,” AC Energy Holdings Inc. President John Eric Francia said. “The devil is in the details. A lot of details and variables need to be thor-oughly studied so the intent and the spirit of the circular is addressed properly.”

Continued from A1

Continued from A1 The BSP also noted the total resou≥rces of banks expanded also by 9 percent to P11.2 trillion at end-June this year. “Assets shifted and reflected banks’ risk-taking activities to maximize returns following the double-digit expansions in the investment portfolio of 13.3 percent and loan portfolio of 12.9 percent, respectively,” the BSP explained. The banks’ more upbeat performance in terms of loans and investments also proved beneficial as net profits grew by 8.1 percent to P68.9 billion in the first half. This was supported by strong expansions in interest-based revenues at 7.8 percent and noninterest based income at 11 percent. Trading income, in particular, registered a hefty growth of 35.9 percent on favorable market sentiment in the first half.

Also, despite the shrinking credit allocation of banks to the real-estate sector, the BSP said that it will remain active in its surveillance of the local banking system’s exposure to the real-estate sector to mitigate the build up of systemic risks. In terms of the physical network, meanwhile, the banking system now has 9,890 branches as of end-June this year. “The country’s archipelagic landscape provides challenges and opportunities in the provision of much needed financial services particularly in remote rural areas. In response, the BSP continues to be responsive by building on its financial inclusion agenda through reforms in the provision of innovative financial products and services in the countryside,” the central bank said.

Banks. . . Continued from A1

By Joel R. San Juan

THE Supreme Court (SC) will now intervene on the contro-versy surrounding the deten-

tion of Delfin Lee, president of real-estate company Globe Asiatique, in the wake of the order of the execu-tive judge of the Regional Trial Court (RTC) in the city of San Fernando, Pampanga, to transfer his detention from the provincial jail to a city jail. Court Administrator Jose Mi-das Marquez, who has supervision over judges nationwide, confirmed that he has received a copy of the motion of the controversial de-veloper complaining against the order of Executive Judge Divina Luz Simbulan of the RTC in Pam-panga for his transfer of detention allegedly due to special treatment at the provincial jail.

“I am look-ing into it [Lee’s plea] to determine what action may be done on the is-sue, or if there’s need for any,” Marquez said.

Marquez con-firmed receiving

a copy of Lee’s motion, as well as Simbulan’s letter and supplemental letter, to Judge Maria Amifaith Fid-er Reyes of Branch 42 of the RTC in Pampanga, who is hearing the case. The SC official said he would also verify reports that an anon-ymous complaint has been filed against Simbulan. “I haven’t seen the complaint yet,” he added. In an omnibus motion filed be-fore the sala of Reyes, Lee, through

his lawyer Salvador Viste Jr., asked the latter to disregard the “advise” of Simbulan to transfer him to the Bureau of Jail Management and Pe-nology (BJMP) administered jail in Arayat, Pampanga. Lee branded “mere conjectures and hearsay” the allegations that he is being accorded special treatment at the provincial jail. After initially suggesting that Lee be transferred to the city jail in Telabastagan, city of San Fernando, the executive judge now wanted the accused in the syndicated estafa case to be moved to a jail facility in Arayat, which is one hour away from San Fernando. In her supplemental letter to Reyes on Monday, Simbulan said the Arayat jail would be more conducive for Lee, as it is not as overcrowded as the Telabastagan facility.

Chief Supt. Wilben Mayor, Na-tional Police spokesman, said the Anti-Cybercrime Group is still ex-amining the authenticity of the vid-eo where the captors of Norwegian Kjartan Sekkingstad, Canadians John Ridsdel and Robert Hall, and Hall ’s Filipino girlfriend Maritess Flor made the demand. “The video is being examined now by the Anti-Cybercrime Group. The Na-tonal Police adheres to the no-ransom policy,” Mayor said, in reaction to the

video, where the Canadians made their appeal to the Canadian government to secure their safe release by paying their ransom. “Our primordial concern is the safety of the victims, and con-tinuous operation is being conducted by the National Police and the Armed Forces for their rescue,” Mayor added. The four victims were kidnapped in late September from a resort on Samal Island, Davao del Norte, by armed men and were reportedly eventually taken to Sulu, hinting the kidnappers were

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

Bandits demand ₧3Bfor 3 foreign hostages

SC intervenes in Delfin Lee’s jail transfer

By Rene Acosta

THE Abu Sayyaf Group (ASG)is demanding P1 billion as ransom for the release of each

of the three foreigners, including two Canadians, that it is holding in Mindanao, but the National Police said it has yet to verify if the demand really came from the bandits.

members of the local terrorist group. However, both the military and the police are not confirming yet that the ASG was behind the abduction, as well as the reported presence of the kidnap-pers and their victims in Sulu. In the video that was reportedly obtained by antiterrorism web site SITE Intelligence Group, Hall and Ridsdel asked the Canadian govern-ment to work out for their release by paying ransom. “We’re being ransomed for P1 bil-lion each. I appeal to the Canadian prime minister and the people of Can-ada, please pay this ransom as soon as possible or our lives are in great danger,” Ridsdel said in the video. The video also showed their cap-tors. Mayor said police cyber-forensic experts were checking the video and trying to elicit information. He added that the video proved that the victims are still alive. He also said that police intelligence personnel were continuously working on the case of the foreigners and are determining the identities of their cap-tors and their particular group, as well as the area where they are being held.

By Henry EmpeñoCorrespondent

SUBIC BAY FREEPORT—USS Key West (SSN-722), a nuclear submarine of the US

Navy, docked at the Alava Wharf here on Wednesday morning amid music from the brass band of an Olongapo City grade school. The visit, however, was not announced by the US Embassy in Manila, which regularly noti-fies the media about the arrival of American warships docking in this free port. Speculations here are rife that the vessel has been placed here on standby for the dura-tion of the Asia-Pacific Eco-nom ic Cooperat ion (A pec) leaders’ meeting in Manila, which will be attended by US President Barack Obama. The Apec conference is sched-uled from November 16 to 20. The Key West, a Los Angeles-class submarine, is the fourth of her class to be equipped with the vertical launch sys-tem (VLS), which is capable of carrying 12 Tomahawk land attack cruise missiles within a range of 1,700 nautical miles, or 3,100 kilometers. It also carries torpedoes and has mine-laying capabilities. The submarine is a veteran of numerous exercises in the Pacific, having supported operations of the US Navy’s Third and Seventh Fleets from 1998 to 2001.

Following the September 11 attacks in the US, Key West was said to be have been redirected to the Northern Arabian Sea, where she launched Tomahawk cruise missiles against targets in Afghanistan in October 2001. In 2007 and 2009, it received

the “Battle E” designation, which is given to the best submarine in the squadron. USS Key West is now homeport-ed in Guam, having been shifted to the naval base there in 2012 as a forward deployed unit for the Seventh Fleet.

US nuclear submarine docks in Subic Bay

SAILORS lash the USS Key West to the dock shortly after the nuclear submarine arrived at the Subic Bay Freeport on Wednesday morning. henry empeño

By Priam F. NepomucenoPhilippines News Agency

MILITARY teams are ready to respond quickly and efficiently should any natural or man-made ca-lamities occur during the Asia-Pacific Economic

Cooperation (Apec) leaders’ meeting in Metro Manila. This was revealed by Joint Task Force-National Capital Region (JTF-NCR) Deputy Commander Col. Vic Tomas in a media briefing on Tuesday. He admitted this is part of the “worse-case scenario” that security forces have studied and prepared for. To counter this, all military humanitarian assistance and disaster-response units are on standby and ready to go. Tomas also said that these units are constantly train-ing to maintain their proficiency and efficiency. The Apec leaders’ meeting is scheduled from No-vember 17 to 20. Earlier, Tomas said all JTF-NCR personnel are conduct-ing drills to prepare themselves for the so-called CBRNE threat. [chemical biological radiological nuclear and explo-sives threat]. Tomas said these exercises are part of the task force’s “full spectrum risk-management preparedness protocols.” Ongoing now are drills and rehearsals to ensure that their units can respond to any eventualities quickly and efficiently. “[Ongoing now are] continuous coordination, rehearsal, test-ing of capabilities of [various] task units and, of course, how fast we can respond to any crisis situations,” Tomas added. The military’s CBRNE capability got a boost in Sep-tember with the donation of $1 million worth of CBRNE equipment. The equipment is sufficient to equip a platoon of specialized troops. Soldiers or those trained in dealing with CBRNE threats would be the first responders should threats arise from these types of weapons.

Military ready for Apec leaders’ meeting

SUpreme Court (SC) Associate Justice martin Villarama Jr. has sought early retirement effective January 16, 2016, citing health reasons. Villarama was supposed to retire on April 14, 2016,

when he reaches the mandatory retirement age of 70. The Judicial and Bar Council (JBC), which screens nominees and gives short list for vacancies in the judiciary, said it may start this month the selection for the imminent vacancy. JBC member Jose mejia said the vacancy would immediately be opened upon approval by the Court en banc of Villarama’s applica-tion for early retirement that he submitted to Chief Justice maria Lourdes Sereno on monday. “If the SC approves Justice Villarama’s early retirement when they resume session next Tuesday [november 10], then we can start the selection process and open the vacancy within the month,” mejia told reporters. mejia said nominations and applications could be filed next month, and public interviews could be set in January. Following such schedule, mejia said the JBC could then come up with a short list by February next year, which means president Aquino may be able to name his sixth appointee to the Court before the period covered by the election ban on midnight appointments. It can be recalled that in 2010, the SC came out with a ruling exempting the appointment for the vacancy in the Court from the ban. Villarama cited his double-knee metal implantation in 2013 and his cataract operation in 2014 as the reasons for his dete-riorating health. “For several years, I have been experiencing difficulty in breath-ing, hypertension and symptoms of prostate illness prevalent among aging men,” read his letter. Villarama started serving the judiciary in 1970 as an SC tech-nical assistant. he rose from the ranks to become a regional Trial Court judge in 1986, then a Court of Appeals associate justice in 1998 and an SC associate justice in 2009. Joel R. San Juan

Lee

SC’s Villarama seeks early retirement

BusinessMirrorThursday, November 5, 2015A4

TheBroaderLook

OFW Gloria Ortinez, 56, hadbeenamigrantworkerforover20years.OrtinezhadjustarrivedfromHong Kong when a carbine bulletwasfoundbyNaia’sOfficeforTrans-portation Security (OTS) personnelinherbagatthex-raysectionoftheairport.Shesaidshehasneverseenacarbinebulletinherlife. “God knows I am a victim oftanim-balamodusintheairportbythese unscrupulous OTS person-nelwhoonlywantedtoearneasymoney,” Ortinez said in subse-quentinterviews. Shewasdetainedafterfailingto pay P80,000 bail on charges ofillegal possession of ammunitionfiled before the Pasay City Pros-ecutor’sOffice.However,thePasayCity Prosecutor’s Office releasedOrtinez,afteritwasfoundthatthephotographsofthebulletpresent-edbytheprosecutionwasdifferentfromtheoneoriginally“found”bytheOTSinherluggage. But, it was a bittersweet vic-tory for her, because she now fac-es the danger of losing her job inHongKongaftertheincident.

Victims’ harrowing experienceTHOSe victimized by the bullet-planting scheme have the sameharrowingexperiencetotell:Theycheckedintheirhand-carrybagsattheairportandassoonasthex-raymachine spits these out, a bulletortwoissuddenly“discovered”intheirbags. In the Philippines illegal pos-session of firearms and ammuni-tion is considered a serious of-fense. Under Presidential Decree(PD)1866,“thepenaltyofreclusion temporalinitsmaximumperiodtoreclusion perpetuashallbeimposedupon any person who shall unlaw-fully manufacture, deal in, acquire,dispose, or possess anyfirearm,partoffirearm,ammunitionormachinery,toolorinstrumentusedorintendedtobeusedinthemanufactureofanyfire-armorammunition.” PD1866wasamendedbyRe-public Act 10591, or an Act Pro-viding for a Comprehensive LawonFirearmsandAmmunitionandProviding Penalties for Violations

Thereof. Passengers targeted formulcting, when confronted withthis draconian edict, based on thebullet“discovered”intheirposses-sion,becomeeasyprey.Notwant-ingtomisstheirflightorotherwiseblowtheirchancestosnagawait-ing job in some foreign destina-tion,theyhavetocoughupatokenamount of, say, P500, before theyareallowedtoleave. Apparently, the money-mak-ing scheme worked so well, it hasbeen going on for allegedly quitesometime.Themalevolentmulct-ing scheme was exposed whena wheelchair-bound passengerfought back. She won the casehands-down. The photograph ofthe incriminating bullet, broughtup by the prosecution, was differ-entfromtheoriginalthatwassup-posedlyinherpossession. Thankstothecourageandcon-victionsofsomeofthevictims,theracket had been finally exposed.They surmised that the perpetra-torshadbeendoingitasfrequentlyas20timesaday.MultipliedbyP500bucks, the minimum being asked,thetotalwouldamounttoP20,000. An American missionaryhas been accused by the securitypersonnel at the Naia of havinga bullet in his luggage. They usedthis pretext of the “planted” con-traband to extort P30,000 fromhim.Becauseherefusedtopayup,20-year-oldLaneMichaelWhiteofFlorida spent six days in jail andgotoutonlyonafewdayslateraf-terpostingabailofP40,000. White was nabbed because ofthe .22-caliber bullet found in hisbag on the morning of Septem-ber 17, when he and his familywere scheduled to take a flight toCoron, Palawan. He ended up be-ingchargedwithillegalpossessionof ammunition before Pasay CityJudgePedroGutierrez. White was the second for-eigner in a week to make such al-legationsagainstairportpersonnelmanning the x-ray scanner at thedeparturearea,wheremembersoftheOTSareassigned. TheOTSsaidtheP30,000“bribe”beingaskedwasamisunderstanding.

“It’sthefineforthosewhoviolatethelaw,”saidlawyerMiguelFF.Oraa,OTSassistantadministrator. A US-based OFW named Ma-vic Templo went on vacation withherfamilyinherhometownBatan-gas.Onthedayofherdepartureatthe Naia at the airport x-ray sec-tion, a male staff approached herand asked whether she’s carryingananting-anting,oramulet,inoneofherpackages. “Isaidno,becauseIneverbuythosethings,”Templosaid. A staff member insisted thatthere was something unusual in-side Templo’s package. She toldhim it only contained a weddingpicture, a serving dish and a smallcollection of old coins. When themanrummagedthroughthebag,heproducedacaliber.22bulletfromin-sidethepouch,whichsentherintoashock.She’sawareoftheprohibitionagainst carrying bullets and fearedshemightmissherflight. “Inthefirstplace,wedon’thaveguns at home. I have never seen acaliber.22before,”Templosaid. Shesaidthestaffmembertookhergreencardandherpassporttobephotocopied,alongwiththebul-let. Then she was told to write anaffidavitofownershipofthe“amu-let,”butsherefused. “Iwillnotwritethosethings,becausethat’snotwhatreallyhap-pened,” Templo said, suspectingthatthemanisattemptingtolinkthe amulet or the bullet allegedlyfound on her luggage. In the end,shesaidshewascompelledtowritethatshehadnoideahowthebulletfounditswayintoherbag. When she asked for the man’snamesoshecouldincludehimintheaffidavit,thestaffallegedlyrefused.Intheconfusionthatfollowed,Tem-plo also failed to photograph themanwithhercellularphone,aswellashissurnameonthenametag. Shesaidshebecamedesperatewhenthestafforderedherhusbandandchildtocheckinsotheywon’tmiss the flight, a well-calibratedmove,althoughthemantoldherinacalmingvoicenottobealarmedandpromisedtogetheroutofherpredicament.

‘Bullet planting’ at Naia scares OFWs, threatens tourismBy Recto Mercene & Butch Fernandez

Just a few weeks after the Ninoy Aquino International Airport (Naia) was removed from a travel web site’s list of “Worst Airports in the World,” the airport was again

the object of derision across the globe. The alleged bullet-planting (tanim-bala in Filipino) scheme hit mainstream and social media, after an overseas Filipino worker (OFW) who was returning from Hong Kong raised a howl of protest after airport personnel purportedly found a carbine bullet in her bag.

Taking a cue from the man’sstatement, Templo forked outP400.Aftershehandedthemoneyover, themanwishedthemasafeflight, saying: “Take care, ma’am.Godbless!” Templo said he rememberedtheexperienceagainafterreadingasimilarstoryofRhedAustriadeGuzmanonFacebook. DeGuzmanisthewheelchair-bound OFW who was forced tocough up P500 to two Naia staffplus P200 to a porter, after twobullets were allegedly “found” inherluggageonSeptember18. AportionofherFBstorysaid:“Bumulong ung porter sa tabi ko. Sabi niya, ‘Ate, ayusin mo na lang.Pwede na yan sa P500.’ Sabi ko sa babae eh, ‘Baka pwedeng tulungan mo ako.’Sagot naman niya, ‘O sige po, iabot mo nalang sakin patago. Baka mahuli ako ngsupervisor.’” “Sa pangalawang pagkakataon eh binody-check ako at dun ko na inabot ang P500 sa kanila. Pati ungporter na bumulong eh binigyan ko ngP200. Ayun, pinayagan na akong umalis!Para saP500eh maninira sila ng pangalan ng tao,”shesaid.

‘International embarrassment’THe airport’s notoriety caughttheattentionofTimemagazine.Itcame out with a story, titled “Air-port security in the Philippineshave been putting bullets in lug-gagetoextortpassengers.”Itssub-headread:“Thisisbecominganin-ternationalembarrassment.” “The job of airport security istoconfiscatedangerousitemsfromsuitcases, but travelers have re-centlyfoundtheoppositeistrueinthe Philippines’s Manila Airport,where staff have allegedly beendropping bullets into the bags ofunsuspecting passengers,” theTime report read. It also quoted aBritish Broadcasting Corp. (BBC)report,sayingthatlegislatorshavecalledforaninvestigationintothesupposedracketthatextortsmon-eyfrompassengersbythreateningtochargeorarrestthemforcarry-ingillegalammunition. TheNaiawasalsocriticizedforhaving closed-circuit televisions(CCTVs) that are positioned farfrom the inspection scene, asidefrom having poor-quality video.Observerswonderifthisisdeliber-ate,sincecamerasincasinosarefo-cusedonthegamblingtablewherepersonnel and gamblers are easilyidentified. More than 30 years ago, thesameCCTVarrangementprovedtobe totallyuselesswhentheassassi-nationofformerSen.BenignoAqui-no Jr., after whom the airport wasnamed,wasneverrecordedorcouldhavebeendeliberatelyerased. Today600piecesofanewex-pensive set of surveillance equip-mentattheNaiahaveyettobein-stalled.Severalbiddingshavefailed,because there are allegations of anapparentattempttocornerthebusi-ness by some quarters. The projecttosituatescoresofCCTVsinallfourNaia passenger terminals and upto the airport perimeter is worthclosetohalf-a-billionpesos.

‘End this national disease’ALARMeD and probably embar-rassedbytheseanticsattheNaia,severallegislatorscameoutsimul-taneously, denouncing the illegalpractice and vowing to end thisnational disease that apparentlystruckourairportlawenforcers. Nationalist People’s Coalition(NPC)Rep.SherwinGatchalianofValenzuela City filed House Reso-lution2419,whichdirectsthecom-mitteesonGoodGovernmentandon Transportation to conduct aninquiry, in aid of legislation, intotheseriesoflaglag-balaincidentsattheNaia. Gatchalian also called for atotalrevampoftheOTSfollowingthe revelation of Tarlac City Rep.Noel Villanueva that he, too, fellpreytothe“laglag-balasyndicate,”while he was leaving for abroadsometimeinAugust2014. Partylist Rep. Jonathan de la

noni

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es

BusinessMirror www.businessmirror.com.ph | Thursday, November 5, 2015

TheBroaderLookA5

Cruz of Abakada said Manila Interna-tionalAirportAuthority(Miaa)GeneralManagerJoseAngelA.Honradoandallother officials involved in the opera-tionsandsecurityoftheNaiaandotherinternationalairportsshouldallsubmittheircourtesyresignation. “even as we are rushing with ourlast-minute preparations for Apec, wemust enjoin all the heads of agenciesin charge of operations and securityat the international airport to submittheircourtesyresignation.Weneedtoputinanentirelynewcrewinchargeofinspectionandsecurity,andfilechargesagainstthoseinvolvedinthislaglag-balaoperation,”delaCruzsaid. DavaoCityRep.andHouseCom-mittee on Labor Chairman KarloAlexeiNogralessaidHonradois“caus-ingpainandanguish”notonlytotheAquinoadministrationbuttotheen-tirenation,aswell.HeremindedHon-rado that the country’s internationalairports, especially the Naia, are thenation’swindowstotheworld. “At the first instance that this la-glag-balascamwasexposedbytheme-dia,weexpectedconcreteandimmedi-ateactionbut,unfortunately,Honradowascontentedmakingexcuses for theshenanigans inside the airports hemanages.Honradomustberemovedifwe reallywant to reformthe imageofourairports,”Nogralessaid. “Travelers using our airports arenowtooterrorizedthattheyevenwraptheirluggagewithmaskingtapejusttostoptheNaiapeoplefromplantingbul-letsintotheirbags.Thisisreallyembar-rassing.Noairportintheworldcanyoufindthiskindofparanoia.OnlyinthePhilippines,”headded. Meanwhile, John Leonard Mon-terona,MigranteMiddleeastregionalcoordinator,saidOFWsfeartheymaybecomevictimsofthesyndicatewhentheyreturnhomeforavacation. “This is quite alarming. Airportauthoritiesmuststepuptheirpolicingfunction at all airports,” MonteronasaidashestressedtheneedtoensurethesecurityoftravelersinthefaceofthecomingChristmasseasonandthehordes of balikbayan and OFWS ex-pectedfortheiryearlytrekbackhome. OFW advocate and senatorialcandidate Susan Ople told the Busi-nessMirrorthatshewouldsupportabillcallingfor“draconianmeasures”ifonlytofreeOFWsfromtheanxietyof unfair treatment at our principalairports. “Wehavebeencallingforathor-oughcleansingoftheairporttermi-nalsundertheManilaInternationalAirport Authority of scalawags andextortion syndicates. Let’s not waituntil an Apec delegate falls victimtosuchascam.Asitis,ourairportshavebecomeasourceoftraumaformany passengers. [Ortinez’s] caseshould serve as an eye-opener forall,especiallythoseingovernment,”Oplesaid.

Demolition job?MALACAÑANG on Wednesdaywashed its hands off the alleged at-tempts to link two key aides ofPresident Aquino in the tanim-balaextortion racket victimizing airlinepassengers. “Wearenot involved inthatmat-ter,”PalaceSpokesmanedwinLacierdasaid.“So,weleaveitwiththecampaignspokespersontodiscussthat,”Lacierdaadded,referringtoTransportationSec-retaryJosephAbaya,LiberalParty(LP)president, and resigned Interior Secre-taryManuelRoxasII,theLP’sstandard-bearerinthe2016presidentialderby. Lacierda sidestepped querieson whether the Palace would pursuecomplaintsfromitsLPalliesthatthetanim-bala controversy was fueled byRoxas’s rivals to turn off voters anddamagehispollchances. This, after Cabinet SecretaryReneAlmendraswasreportedtohavebrushed off similar questions on thetanim-bala controversy, saying thatPresidentAquinowasnotbuyingthetheorythatthetanim-bala racketwasademolitionjobagainsttheadminis-trationanditsallies. Abaya and Roxas supporters werealsoearlierreportedtohavetaggedthetanim-balaracketasaschemetoderailthe chances of administration-backedcandidatesinnextyear’selections.

PresidentAquino,movingtostopthe racket victimizing innocent air-line passengers believed targeted forextortion by members of an airportsyndicate,hadorderedAbayaandtheDepartment of Transportation andCommunications (DOTC) to “cast awidenet”inlookingintotheanomaly.Abaya,however,hasyettorenderare-porttothePresidentonthematter.

‘Unbelievable’THe BusinessMirror interviewedthe ranking officials with direct re-sponsibility and control over theirpersonnel at the principal airport:Honrado; PCSupt.Francisco Balaga-tas, director of the Aviation Secu-rityGroup(Avsegroup);andCommo.(ret.) Roland S. Recomono, OTS ad-ministrator. Honrado,throughhisspokesmanDavid de Castro, offered a preparedstatement.“Firstly,theManilaInter-nationalAirportAuthorityrecognizesthefactthatsecurityscreenersattheairportarepersonneloftheOfficeforTransportationSecurity(OTS),anat-tachedagencyoftheDOTC.” “Assuch,theMiaahasnoadmin-istrativecontrolovertheirpersonnel.Considering recent events, the OTSconductsitsinvestigationwithregardtoitsownpersonnel,”hesaid. “In instances that OTS person-nel—or any airport worker for thatmatter—at the Naia are involved inany investigation or have pendingcasesagainstthem,theMiaarevokestheiraccesspasses.Thenamesofthepersonnel are also included on thestop list order of the airport,” Hon-radoadded. De Castro said the Miaa coordi-natescloselywithconcernedagencies—such as the OTS and the PNP-Avseg-roup—intheinvestigationofsuspects. “Among others, the Miaa providesCCTVfootageasneeded,”hesaid. “The Miaa wishes to remind thepublicofproperscreeningproceduresattheairport.OnlythepassengermayopenhisorherbaggagebeforethisissubjectedtoanymanualsearchbytheOTS. An officer from the PNP-ASGmust also be on standby to witnessany manual searches, particularlythose involving initial finds of am-munition and explosives,” de Castroadded. Balagtas, for his part, said thereis a “lingering suspicion” that un-known persons with an ax to grindagainst the Aquino administrationhaveahandonthissorryepisodetoembarrassthePresident. “OurrolehereistoactontheOTSendorsementandnootherparticularworkbuttofileacaseoncereferredtous,”Balagtassaid. When asked if his personnel as-sistthepassengerswiththeirluggage,hesaiditusedtobeatraditionalprac-tice,whichhehadbanned,especiallythosewearingpoliceuniform. Balagtas added that they cannotbelieve that despite the frequent ex-posésinthenewspapers,someofhismenwouldcontinuetoengageinthe

swindle,knowingthat they facestiffsanctions,suchasbeingkickedoutoftheservice. HecitedtheexampleofAugustoDagan, the 60-year-old resident ofQuezonCitywhowasfoundwithtwopieces of live 9-millimeter bullets atthe Davao International Airport lastSaturday. Davao International Air-port is under the supervision of theCivil Aviation Authority of the Phil-ippines. Airport Area Manager efrenNagramasaidDaganwassupposedtofly to Manila via Philippine Airlineswhen he was arrested. He posted abond amounting to P120,000 for histemporaryliberty. Balagtassaidnooneamonghispersonnel has been suspended orterminated for allegedly being in-volvedinthetanim, laglag balaswin-dle, although many of them werekicked out for other offenses. Hesaidthemajorityofthosecaughtinpossessionofthebulletsadmittheywere amulets, meant to protect thewearerfromevilspirits. WhenaskedaboutthecaseofOrti-nez,Balagtassaidshewas“releasedforfurther investigation [RFI], he said, inthemilitaryparlance. “Thedecision torelease her is made by the Pasay Cityprosecutorthatisbeyondourcontrol,”headded. When pressed that the photo-graphic evidence showed in Pasay isdifferentfromtheoriginalphotograph,Balagtas said both original photosshould be compared side by side. “Thephotograph is elongated or distorted,duetoparallax.” When told that the elongation isunnecessary because the two photo-graphs show different calibers of bul-lets,Balagtassaidheisnotprivytothedetailsoftheincident. Balagtasaddedthatifhehadhisway, he would allow passengers withamaximumoffivebulletsinthemtobeallowedtogothrough,as theevi-dencecanbeconfiscated,thewaytheyconfiscate liquid and bottled itemsbeyondacertainvolume.HesaidheisconstrainedbyPD1866. The airport, over the years, hascollectedtruckloadsofperfume,aero-sol,bottledwater,bodyspray,scissorsand knives. In one instance, then-airportmanagerAlfonsoCusispreadalloftheseconfiscatedmaterialsonaparking lot and tried a road roller todestroyalloftheminthepresenceofthemedia. When the BusinessMirrorasked Recomono to comment on thecurrentsadepisodeinvolvinghismenaboutthelaglagortanim-balascheme,he said, “Fort OTS is being besieged,liketheIndiansattackingtheAlamo.” “The conclusion is that the tanim-bala, especially if wrapped or in thepocketofthepassenger,orintheirwal-letistrue,canyoudothat,itseemsveryillogical,”hesaid. Recomono then explained tothe BusinessMirror the procedure,from the time the passenger placeshis or her bag into the open maw ofthex-raymachine,untilitexitsatthe

outgoingend. Fromthemomentdepartingpas-sengersentertheairport,theycheckin their pieces of luggage, includinganyhandcarrybagsorcasesthroughthe mouth of the x-ray machines.Thenthepassengerswalkthroughthebodyscanner. “Ang sinasabi ko sayo, tinanim ba dun?Soyouhavethex-ray,youhavethe walk-through for the passen-ger, you have the operator, inspec-tor, and two friskers, one male andonefemale,whodothe‘patdowns,’anda‘passengercontroller,’whoan-nounces if one had to divest him-self/herselfofanymetalobjects.” That means there’s a total offive personnel present, four fromthe OTS and one from Avsegroup.Recomono said if passengers come“clean” they pick up their bags out-side of the x-ray mouth, includingtheirchecked-inluggage. “Normally on the average, ittakesfromsevento10secondsforthewholeprocess,mabilis ’yan,”hesaid. Recomono said a problem wouldoccur when the x-ray inspector seessomething worthwhile looking intoclosely, which would require openingtheluggage,whichshouldbedoneinthepresenceofthepassengersandtheOTSpersonnel. “Ang nagkakaroon ng problema, ’pag nagkaroon ng inspeksyon, ang naglala-gay ng kanya-kanyang dala ’yung pasa-hero—asamatterofprocedure—para ma-x-ray, never ’yung screener,” hesaid. “Ifsomeonepointsoutthatitwasplanted, did the screener do it? Myanswer isno,because it couldnotbedone, because the screener is seatedathispost,hecouldnotdoit.Itisthepassenger who placed the luggage,”Recomonoadded. Recomonosaidithasbeenhispolicy,sinceheassumedoffice,forhismentore-cordeveryincidentattheairport.Heas-sumedofficein2012. In2013therewere2,184;in2014,1,813 and up to September this year,1,540incidentsofvariousoffenseswererecordedbyhismen. Recomono earlier explained theprocessleadingtothediscoveryoftheincriminating evidence, such as bul-letsandthesubsequentmovesbytheauthorities, “to put the situation inthepropercontext.” “Normally, it is being equated toextortionortogetfavors,”hesaid. He said that what usually ap-pearsinthenewspapersisthattheextortionattemptsarebeingdoneat what they call the “screeningcheckpoints.” So far, Recomono said there were68OTSpersonnelwhohavebeensepa-rated from the service “for grave mis-conduct,” a veritable salad of offensesthatcouldincludesolicitingtips,whichtheOTSprohibits. Airport officials said they wouldlook deeper into the mulcting inci-dents.Ataskforce,whichhasyettobeofficiallynamed,wouldeventuallybeformedtoconducttheinvestigation.

‘Bullet planting’ at Naia scares OFWs, threatens tourismBM

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Thursday, November 5, 2015 • Editor: Angel R. Calso

OpinionBusinessMirrorA6

A global embarrassmenteditorial

The Ninoy Aquino International Airport (Naia) has been in the headlines recently because of the growing number of incoming and outgoing pas-sengers being detained for bullets found in their

luggage as they pass through airport security, courtesy of the tanim-bala schemers.

International news magazine Time just recently exposed to the world how the tanim-bala shakedown works in an article titled: “Airport Security in the Philippines have Been Putting Bullets in Luggage to extort Passengers.” “The job of airport security is to confiscate dangerous items from suitcases, but travelers have recently found the opposite is true in the Philippines’s Manila airport, where staff have allegedly been dropping bullets into the bags of un-suspecting passengers,” the magazine said.

Thanks to the notorious scammers at the country’s premier gateway, we are now on top of the list of risky destinations for tourists. If things weren’t embarrassing enough on the local level, the Philippines has also become the butt of jokes in the global community.

A recent example is the travel advisory supposedly issued by the US State De-partment warning Americans traveling to the Philippines, including President Barack Obama, to be watchful at the Naia. The American president is one of the many dignitaries set to attend the Asia-Pacific economic Cooperation Summit in Manila this month. Obama is known to want to carry his own overnight bag and briefcase whenever he travels to other countries. “The State Department has therefore advised Obama to wrap his briefcase with plastic when he arrives in and departs from Manila so that he is not victimized by the tanim-bala schemers.”

The United Nations, however, is all serious business when it warned its staff against the tanim-bala racket in Manila. “Staff members are advised to keep your luggage with you, lock your luggage and consider wrapping your luggage in plastic as an extra security measure,” the agency said in an internal memo.

The government must not treat the extortion activities at the Naia lightly. Government inaction will only embolden the scammers, who seemed unde-terred by the scathing social-media attacks and news headlines. They do not discriminate in their extortion activities: Foreigners, old women, overseas Fili-pino workers, students and even persons with disabilities are all fair game to them. If we believe recent reports, the racket has been going on for quite some time, under the very noses of airport officials. Unfortunately, Malacañang re-cently tried to downplay the racket, fanning more public outrage.

There’s a lot of Malacañang and Naia bashing on social media nowadays, which should alarm the President. here are some colorful words from those venting their anger online: “Ruthless extortionists,” “buwaya,” “idiots,” “puñeta,” “disgusting,” “scumbags,” “scary,” “disappointing,” “unbelievable,” “shameful,” “kagaguhan” and “gawaing demonyo.” We wish we could include the pile of un-printable feedbacks that go with these “polite” online comments.

Clearly, the writing is on the wall—or on the monitor, if you will. The government must stop pretending that the Naia tanim-bala scam is not a big deal. Steps must be taken at once to stop the crime that could ruin our multi-billion-peso tourism industry. After all, as a wise author puts it, “everything rises and falls on leadership.”

IT would be easier to discuss the issues that most people are greatly interested in: politics, noontime television, politics, the latest government controversy, and, of course, politics.

First of two parts

AS supply chains become more globalized, the vulnerability of businesses to calamities increases. Local disasters have impacts that ripple through the entire regional and global

supply chain, causing indirect losses to businesses all over the globe with massive adverse macroeconomic effects.

20/20 foresight

How climate change affects the global economy

But I can remember when gasoline was P7 per liter (or P18 at today’s peso/dollar exchange rate) and you could al-most always drive from the current loca-tion of SM Megamall to SM North Mall in about 15 minutes.

The reason I mention this is because much of life comes down to “If I knew then what I know now....” We talk about how 20/20 hindsight is always perfect but the reason it is accurate is because the future never looks like the past. No one ever said that they wished they had worn their sunglasses today because they did not expect the sun to rise.

however, we seem to have an aversion to actually expecting change, let alone predicting that change will happen. When the Metro Rail Transit (MRT) Line 3 opened on December 3, 1999, the rated daily capacity was 450,000. Now, daily ridership is 600,000. Did anyone hon-estly expect that a capacity of 450,000 was going to be sufficient forever?

T he day the MRT 3 started operating was at least the day plans should have been made to increase capac-ity before—not when—it was needed. Most people with common sense and the financial ability are not at the mar-ket buying food at 6 p.m. to be cooked and served for dinner at 7 p.m.

In truth, all the clues for what is go-ing to probably happen in the future are available today. The MRT 3 reached its projected daily capacity in 2004. By early 2015, the system was carrying around 600,000 during weekdays. The MRT 3 “Capacity expansion Project,” designed to increase capacity to 520,000 passen-gers a day, is still in the works. Sadly, by the time this program is fully imple-mented, we will immediately need to in-crease capacity to 650,000. Who knows?

So what are some situations that we should be thinking about now to avoid “If I knew then...” later?

Let’s take something small and close

Direct losses from disasters include complete and partial destruction of a business’ stocks and assets, such as damage to their production facilities, work spaces and product. There can also be indirect losses, as a consequence of disruption in the supply chain, poten-tially impacting other clients, partners and suppliers throughout the globe and ultimately undermining long-term com-petitiveness and sustainability.

The issue is particularly urgent in the Asia-Pacific region, the world’s most disaster-prone region, accounting for almost 70 percent of the world’s disas-ters. The Philippines alone, located in the Pacific Ocean and directly within the Ring of Fire, constantly faces the risk of typhoons—averaging about 20 a year—earthquakes and volcanic erup-tions. As an archipelago, 70 percent of our cities and municipalities are in coastal areas, leaving communities who remain unprepared even more at risk. Superty-

phoon Yolanda (international code name haiyan), which hit the Philippines in November 2013, left 4.1 million people displaced and over 6,300 dead in its wake.

As representatives of the business sector, Apec Business Advisory Council (Abac) believes that it is vital—now more than ever—that we mount a focused, co-operative effort to address the economic threats posed by the new normal and move forward with concrete actions to build communities that are resilient in the face of disaster. This includes efforts to ensure that the region is equipped with the necessary instruments, tools and infrastructure to mitigate the im-pact of disaster.

Abac sees that efforts in building disaster resiliency should work toward strengthening micro, small and medium enterprises (MSMes) resilience, building and strengthening global value chains, building resilient infrastructure, build-ing sustainable, resilient communities,

without world shattering implications. Telstra Corp. out of Australia is joint venturing with San Miguel Corp. to become the third major telecom player. The stock market doesn’t like this as shown in the recent price moves of the Philippine Long Distance Telephone Co. (PLDT) (I really wish they would change the name to “PLDT” and be done with it) and Globe Telecom.

Three weeks ago, I liked PLDT shares; now, not so much. Telstra/San Miguel is going to come in and very quickly “earthquake” the cell phone and Internet market in the Philippines. Or it is not. either way, if PLDT shares are trading at P500 a year from now—and I am not saying they will—you cannot say “how did that happen?” like the government does for its bad foresight.

The US government debt is now $18.5 trillion. That is equal to 64 years of the Philippines’s total annual economic out-put. The US has more outstanding debt than all the european Union countries combined, and is greater than all the debt of China, Japan and Germany.

This situation is both sustainable and unsustainable. It is sustainable until investors stop loaning money to governments at zero-interest rates and then that debt becomes unsustainable. It may happen in 2016...or not. What happens will be total financial chaos but you will be ready because you know it will eventually come. There will not be any “If I knew….”

The Philippine stock market is going

to have to claw and fight for every point higher until Philippine interest rates are lowered. In the West, equities are the only alternative to putting money into banks and government bonds. That is not true here. But in the next months, the Bangko Sentral ng Pilipinas (BSP) will start using an “interest rate cor-ridor.” Rather than simply lowering or raising interest rates, the BSP will use and operate within a banded guideline which, under current conditions, is be-tween 2.5 percent and 6 percent. That is a very wide spread.

Therefore, if the stock market can have a positive November and a rela-tively quiet (or positive) December, the first quarter of 2016 will see prices move higher and with even more volatility than we have had in the last months. In six months, there will not be any ex-cuse at all for looking back and wishing you had bought the market like maybe you do for not buying 18 months ago. Listening to just the rhetoric of the presidential candidates, they would not do well in business. No business owner ever would say, “In three months, we will expand.” What they say is, “If this happens, then we will do this.” That is 20/20 foresight.

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

developing disaster-risk financing, and developing information and communi-cations technology infrastructure resil-ience against natural disaster

MSMes are among those that are most vulnerable to the impact of disas-ters. As such, it is important to capaci-tate MSMes toward building business resiliency in their operations. To do this, we need to develop best practices for strengthening MSMe resilience, which will cover measures to mitigate the impact of natural disasters, finan-cial crises and other unexpected events. There is a lot to be drawn from lessons from responses to past crises and suc-cessful experiences in the use of micro-insurance and disaster-risk finance.

Production operations no longer operate in isolation. Today, trade and investments are increasingly organized within so-called global value chains (GVCs), with the different stages of the production process situated across different economies. A striking fact is that one disaster not only impacts the economies of those directly affected, but it also disrupts the region’s entire value chain and the global supply chain, as well.

Abac urges Apec to examine mecha-

nisms, such as global data standards, to strengthen the resiliency of GVCs in order to enable them to navigate the challenges brought about by natural di-sasters. We need to give serious thought and attention to building data standards, sharing and accessibility. Today’s supply chain means integrating traditional and nontraditional types of information.

The new normal has made the occur-rence of high-impact disasters increas-ingly frequent throughout the region. The resulting damages to the world’s built infrastructure is very alarming; thus it is important for both the private and public sectors to look for solutions to bolster the strength and build resiliency of infrastructure in order to mitigate the impact of natural disasters.

Next week: Abac initiatives to address the vulnerability of MSMes to calamities

The Abac provides advice on specific business sector priorities, responds when the various Apec fora request information about business-related issues, and provides the business perspective on specific areas of cooperation. Abac comprises of up to three members of the private sector from each economy.

Abac members are appointed by their respective leaders, and represent a range of business sectors, including small and me-dium enterprises. This private sector body presents recommendations to Apec Lead-ers in an annual dialogue and advises Apec officials on business sector priorities and concerns. Abac meets four times per year, and Abac representatives also attend Senior Officials’ Meetings, the Annual Ministerial Meeting and the sectoral Ministerial Meet-ings. www.abac2015chair.com

OUTSIDE THE BOXJohn Mangun

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Thursday, November 5, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

Total love and total trust

God is certainly to be praised, for He truly cares for the little ones, the oppressed and the suffering (Psalm 146:7, 8-9, 9-10). The poor widow is definitely to be praised, for

she was ready to give all she had in faith and in response to God’s love (Mark 12:38-44).

Praise the Lord, for He caresTHe Lord deserves our trust and our praise because of all He has done and is doing for us. The psalmist reminds himself to praise the Lord and offers a series of statements il-lustrating God’s amazing goodness and graciousness. He is the “God of Jacob”—meaning He gave special protection to Jacob and to the en-tire people named after Him. God is faithful to His covenant promises. He delivered the people from bond-age in egypt and took care of Jacob’s descendants during their sojourn in the desert. For anyone belonging to God’s people Israel, such faithful-ness on God’s part is reason enough to praise Him. God’s mercy and compassion to those in every sort of need is extolled next. one can be bowed down in life due to many and dif-ferent painful situations, like physical disability as in blindness, mental or emotional affliction, eco-nomic or social tribulations. But

whatever it is, God is there to raise up the needy, giving them confi-dence and their life back. Strangers or foreigners are sure of His protec-tion, as when He protected Israel when they themselves were aliens in egypt. Widows and orphans are sustained by the Lord, who cares for them against those who would take advantage of them. For the Lord thwarts the wicked in their evil ways, even as He loves the just. Surely, the Lord will reign forever, the eternal ruler in Jerusalem, the glorious sovereign of Zion at the center of the lives of His own people. Praise the Lord! Alleluia! Beware of those pretendingJeSuS embodies the double com-mandment of love of God and of neighbor. And He unmasks the dis-crepancy between the message and the behavior of those supposed to be teachers of others. The scribes as experts of the law know all the right things in connection with God

and they guide the public about all the needed regulations on how to live properly as God’s people. They know the teachings at the heart of Israel, but they obviously have not taken them to their own hearts. With pretension and duplicity, these hypo-crites say one thing and do another.  They are in love with the externals of long-flowing robes, salutations in the marketplace, and best seats at synagogues and banquets. even when they pray, it is all appearances; their main concern is how they are perceived by the people. They are prisoners of their egos; they need to be center and up, constantly fanned by adulations. And this self-love has no space for love of neighbor. They plunder even the meager resources of a widow, a symbol of the most vul-nerable in their society. In the world of evil, the weakest is the prey of the most rapacious. The widow praying to God for help gets the assistance of scheming scribes who know how to fleece her best.

She gave everything she hadWHy was Jesus sitting opposite the temple treasury? He was evidently opposed to the whole atmosphere about money going on in the area. He has something to teach His fol-lowers and it is more effective to do so on site. The treasury is a public display of the rich parading their large sums and wowing everybody with the long sound of their big coins sliding down the donation receptacles. But Jesus was not at-tracted by the rich, who give to the

temple out of their surplus. Like the scribes, they know how to take care of themselves; they are not despoiled in anyway. Jesus calls the attention of His disciples to a poor widow who came and put in two small copper coins worth a penny. The widow divested herself of all she had to live on. That was her response in totality to what she believed in to be God’s absolute love for the needy and the little ones, for orphans and widows like herself. That was her way of entrusting her-self totally in God’s hands. She may be penniless, but she had God’s love to hold on to. Her faith was real, un-like many others frequenting the temple who have turned it into a “den of robbers” (Mark 11:17).

Alálaong bagá, the concern of Jesus is the gap between what is preached and what is practiced, the discrepancy between our faith and our life. Self-love can replace the love of God, as in the case of the scribes or well-educated believers who are not really open to God and are rather owned by their egos. They can even with clear conscience take advantage of the defenseless. The widow, in giving all she had, reflects her true value, her poverty in spirit in addition to being poor materially, knowing that she lives and depends on the love and mercy of God.  

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

AlálAong BAgáMsgr. Sabino A. Vengco Jr.

Strengthening state ties: Amendments to the PHL-France tax treaty

durInG the state visit of French President François Hollande in the Philippines, he expressed his hope to expand and strengthen bilateral ties between the Philippines and

France. It is, thus, not surprising that in the wake of the French president’s state visit, the Bureau of Internal revenue issued revenue Memorandum Circular (rMC) 65-2015 on october 7, 2015, circularizing the full text of the “Protocol Amending the Agreement between the republic of the Philippines and the Government of the French republic for the Avoidance of double Taxation and the Prevention of Fiscal evasion with respect to Taxes on Income.”

By Debra Mao and Sharon Chen | Bloomberg

THe leaders of China and Taiwan plan to meet on Saturday for the first time since their civil war seven decades ago, shaking up the island’s politics two months before an election that

could lift the opposition to power.

The said protocol was signed on november 25, 2011, and entered into force on February 1, 2013, introducing a new Article 26 of the convention be-tween the Government of the republic of the Philippines and the Government of the French republic for the Avoid-ance of double Taxation and the Pre-vention of Fiscal evasion with respect to Taxes on Income. The change was introduced to reflect internationally agreed standards on tax transparency and exchange of information.

The original text of Article 26 of the convention provides that the competent authorities of the contracting states shall exchange information at their disposal, necessary for the prevention of fiscal fraud or evasion of income taxes. Infor-mation so exchanged shall be kept secret, and will not be disclosed to any persons or authorities, court or administrative bodies, concerned with the assessment, collection or enforcement of income tax-es. However, the obligation to exchange information does not require the state parties to carry out administrative mea-sures, or to obtain information, against their laws or administrative processes. Likewise, the obligation to exchange in-formation does not require the parties to supply any trade, business, indus-trial, commercial or professional secret of trade information, the disclosure of which would be contrary to public policy.

With the entry into force of the Pro-tocol on February 1, 2013, Article 26 of the convention was deleted, and replaced by a new Article 26, which, though con-taining provisions similar to the origi-nal article, expanded the obligations of the parties on exchange of information. The new Article 26 provides that the obligation to exchange information is not limited by Article 1 of the conven-tion, regarding the persons covered by the convention, and neither is it limited by Article 2, regarding the type of taxes covered by the convention. Thus, the information, which may be exchanged between the state parties, are not limited to information concerning residents of either or both state parties, and neither is such information limited to those in-volving income or other similar taxes. However, the use of the information should only be for purposes of assess-ment or collection of taxes, enforce-ment or prosecution in respect of taxes, the determination of appeals in rela-tion to taxes, or the oversight thereof. And though still treated as secret, the

information exchanged may be disclosed in public court proceedings or in judicial decisions. Likewise, the state parties are required to take necessary measures to ensure availability of the information, and the ability of competent authorities to access such information and to trans-mit it to the other state party.

The protocol requires a state to use its information-gathering measures to ob-tain information requested by the other state, even if the requested state does not need the information for its own tax purposes. And, a state cannot decline to supply information solely because it has no interest in such information. A state is also prohibited from declining to supply information because of the reason that the information is held by a bank, other financial institution, nominee or person acting in an agency or fiduciary capacity, or because the information related to ownership interests in a person. It must be pointed out that this is in line with the Philippines’s own domestic laws, since, under republic Act 10021, the local tax authorities can request for information and records from banks and financial institutions, when requested by the tax authority of a country which has a tax treaty with the Philippines, or is a party to a convention wherein the Philippines is also a member.

The changes introduced by the pro-tocol, as outlined above, are relevant in light of the Philippine president’s invita-tion for French companies to invest in the Philippines. With the projected influx of French investments in the country, tax transparency and exchange of informa-tion between the Philippines and France are of utmost importance. It is, thus, the opportune time for both states to abide by the provisions of the Protocol to en-sure that a viable channel for exchange of information be put in place.

The author is a junior associate of Du-Baladad and Associates Law Of-fices, a member-firm of World Tax Ser-vices Alliance.

The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be sup-ported therefore by a professional study or advice. If you have any comments or ques-tions concerning the article, you may e-mail the author at esther.weigand@bdblaw.com.ph or call 403-2001 local 340.

Historic China-Taiwan meeting shakes up island’s president race

The encounter between Chinese President Xi Jinping and his Tai-wanese counterpart, Ma ying-jeou, in Singapore would cap eight years of flourishing ties between the old foes under Ma’s ruling Kuomintang. While the pair agreed to meet as “leaders”—not “presidents”—the event would provide a new high-water mark in a relationship that has long been at the center of tensions between China and the uS.

The tête-à-tête, which Ma was seeking before he leaves office next year, ensures the politically divisive China issue remains at the center of Taiwan’s presidential election. The meeting will appeal to those who see greater reconciliation with Asia’s largest economy as necessary or inevitable, but it also risks driv-ing some voters closer to opposition leader, Tsai Ing-wen, whose party officially supports independence.

“This is a major, major break-through in cross-strait relations,” said Li Mingjiang, an associate pro-fessor at the S. rajaratnam School of International Studies in Singa-pore. The meeting will be largely symbolic, an opportunity for Ma to leave his mark on history, Li said. Both sides said no new deals were

expected from the encounter.“For Xi Jinping to make this deci-

sion is already a major concession,” Li said. Taiwanese stocks rose the most in eight weeks after the meet-ing stoked optimism that improving cross-strait relations would boost the island’s economy. The Taiex in-dex of shares climbed 1.7 percent to 8,857.02 in Taipei, the highest close since July.

Mao-Chiang toastTHe meeting may help Communist Party leaders in Beijing secure gains that have seen the mainland become Taiwan’s biggest trading partner. Top leaders from the two camps haven’t met since Mao Zedong and then-KMT leader Chiang Kai-shek raised their glasses to toast the defeat of the Japa-nese in 1945 before resuming their civil war. Four years later, Chiang fled to Taiwan, beginning 66 years of separate rule marked by occasional flare-ups and no formal peace deal.

Since envoys from the Commu-nist Party and KMT first met in Sin-gapore in 1993, the two sides have engaged in a series of increasingly high-level exchanges under the prin-ciple that they’re both part of “one China.” Xi had earlier rejected Ma’s

invitation to meet at the Asia-Pacific economic Cooperation Summit in Beijing last year.

Plans for Saturday’s meeting were announced by Ma’s office late Tues-day evening in Taipei. China’s official Xinhua news Agency later confirmed the deal in a short report, saying the two would exchange opinions on pro-moting the peaceful development of relations across the Taiwan Strait.

US reactionTHe announcement follows remarks by Xi in october 2013, saying the two sides couldn’t pass their conflict “from generation to generation.” Ma followed three months later by tell-ing the Taiwanese people in a new year’s day address that the political stalemate with China had to end.

White House Spokesman Josh earnest said at a briefing on Tues-day that it was “too early” to call the meeting a turning point in rela-tions, and reiterated uS support for a “stable and peaceful cross-strait relationship,” as well as its one-China policy. under the Taiwan relations Act of 1979, the uS is bound by law to safeguard peace and security in the Taiwan Strait.

The meeting comes as the island of 23.5 million people prepares to select a successor for Ma in a presi-dential election on January 16. Tsai, the chairman of the democratic Progressive Party, or dPP, has en-joyed a comfortable lead in opinion polls for months, and the KMT last month abruptly dropped its nominee

in favor of its chairman, new Taipei Mayor eric Chu.

Presidential election“XI is trying to bolster the KMT’s election fortunes,” daniel Blumen-thal, the American enterprise Insti-tute’s director of Asian Studies, said in an e-mail. If Tsai wins, she should insist on presidential-level meetings with Xi, Blumenthal wrote.

While Taiwan’s flagging economy and other local issues have dented KMT support, concerns about closer ties with China have also weighed on the party. Its original nominee, Hung Hsiu-chu, had suggested sign-ing a peace treaty with the mainland. The dPP’s Tsai says she supports maintaining the status quo with China, but has resisted calls to en-dorse the idea that both are part of a single China.

Tsai was leading a three-way con-test for president with support from 46 percent of respondents, according to TVBS Poll Center survey released on october 20. Chu trailed with 29 percent, while a third candidate, James Soong, received 10 percent.

Taiwan opposition democratic Progressive Party Spokesman Cheng yun-peng called the timing of the Xi meeting “questionable” and said Ma must explain its purpose to the public. The president said he intends to do just that in a national address on Thursday.

“A meeting of the two leaders has always been a goal,” Ma spokesman Charles Chen said in a statement.

noW that China has laid to rest its infamous “one-child” rule, it’s time to retire the “population

bomb” fears that inspired it.The one-child rule grew from a

population panic in the 20th century, when human numbers were growing at a faster rate than ever before (or since). The increase conjured a dystopian hell of environmental destruction, resource shortages and massive human suffering.

In 1968, for example, biologist Paul ehrlich famously declared, “The battle to feed all humanity is over”—and hu-mans had lost. He warned that hundreds of millions would starve to death in the next decade, and counseled “triage” in foreign aid programs. (India, considered a lost cause, didn’t make his cut.)

ehrlich’s worst predictions never came to pass, thanks in part to the Green

revolution and improved access to fam-ily planning. But population alarmism continued to inspire abuses.

In addition to China’s one-child rule, there were abhorrent campaigns of forced sterilization in Indira Gandhi’s India and Alberto Fujimori’s Peru.

Though the population bomb was de-fused, the issue never really went away. Human numbers still increase by more than 80 million every year, the equiva-lent of adding another united States to the world every four years. And, while a certain amount of future growth is in-evitable, choices made today will deter-mine how high world population—now at 7.3 billion—climbs. According to the un Population division, there will be somewhere between 9 billion and 13 bil-lion of us by the end of the 21st century.

What does that mean, for people and

the planet? Today we have a much bet-ter understanding of the dynamics of population growth, which are shaped by a wide range of factors, including consumption patterns, technology and the distribution of wealth.

It’s hard to generalize about the envi-ronmental impact of population growth because some people have a much big-ger footprint than others. The average American, for example, emits 17 tons of climate-changing carbon dioxide every year, while most sub-Saharan Africans produce less than a ton. So, relatively slow growth in the uS contributes more to climate change than rapid growth in Africa.

Still, while there are great dispari-ties in environmental impact among the world’s people, everyone has some im-pact. We all share an inalienable right to

food, water, shelter and the makings of a decent life. If we take seriously the twin imperatives of sustainability and equity, it becomes clear that it would be easier to provide a good life—at less environ-mental cost—for 9 billion rather than 13 billion people. While there is no global shortage of water, a growing number of regions are chronically parched. That is where human numbers are growing most rapidly. In the world’s “water poor” coun-tries, population could double by 2050. In those countries, slower growth could reduce demand and buy time to craft long-term solutions.

or poverty. Thanks to family plan-ning, fertility rates are dropping nearly everywhere, but they remain high in the least-developed countries. As a re-sult, the population of those countries, now at nearly 1 billion, will double by

mid-century and triple by 2100, rais-ing the hurdles development must leap.

Let’s be clear: Slowing population growth is not a panacea for the challenges of the 21st century. It will not cool the planet, solve the water crisis or eradi-cate poverty. But it could give families and nations a chance to make essential investments in education, health care and sustainable economic development. And it could reduce pressure on natural systems that are reeling from stress.

The good news is that we know how to do this without coercion and abuse. A half-century of experience has shown that the best way to slow population growth is not by limiting family size but by ensuring that all people are able to make real choices about childbearing.

That means access to voluntary fam-ily planning and other reproductive-

health information and services. It means education and job opportunities, especially for women. And it means tack-ling the deep inequities—gender and economic—that prevent people from determining the course of their lives.

elements of this approach have been successful in countries around the globe. But there is still much to be done. To-day, the uns estimates that some 225 million women in developing countries want to delay or prevent childbearing but lack access to contraception. More than 60 million girls are not in school. And there are very few countries where women have achieved economic or po-litical parity with men.

Addressing these challenges is vitally important as a matter of human rights and social justice. It is also fundamen-tal to managing population growth. TNS

China drops its ‘one-child’ policy, now let’s ban the ‘population bomb’

TAx lAw for BuSineSSAtty. esther M. weigand

briefsp93.87b disbursed for yolanda rehab projects–dbM

Budget Secretary Florencio B. Abad has admitted that the government has released only P93.87 billion of the required funding worth P150 billion for the rehabilitation of Supertyphoon Yolanda-devastated areas. He said the amount was released in tranches from 2013 to 2015 to fund projects for Yolanda-hit communities. Abad, however, justified that the department of Budget and Management (dBM) has been transparent in releasing funds to programs and projects of the government, including those for Yolanda projects. “Of the total requirement of P150 billion for rebuilding the communities hit by Yolanda, we have released a total of P93.87 billion as of October 23, 2015,” said Abad in a news statement released on Wednesday. Former National treasurer and uP Prof. Leonor Briones, convener of Social Watch, said based on records of the National Housing Authority (NHA), a total of 205,128 families are still living in “high-risk zones.” But so far, the NHA has only been able to build 16,544 housing units since the disaster struck in November 2013, which is way below target, Briones said. “At the rate they’re going, they are building only 9,000 to 10,000 units a year. If nothing changes, the NHA might only be able to accomplish the target of 205,128 houses in the next 18 years,” Briones said in a separate news statement. Estrella Torres

house to probe slow internet connectionPARtY-LISt Rep. Jonathan de la Cruz of Abakada has sought an investigation on the implementation of the fair-use policy (FuP) on Internet users in the country, which he described as “so slow and so far behind.”

In House Resolution 2344, de la Cruz urged the House Committee on Information and Communication technology to investigate the impact of slow and expensive Internet connection to consumers and businesses.

de la Cruz said the country is lagging behind its Asian neighbors and that it is the third to lowest in terms of connection speed, just behind Vietnam.

According to de la Cruz, the PLdt group has 72.5 million subscribers composed of 24.7 million Smart subscribers, 31.9 million talk ’N text subscribers and digitel/Sun subscribers with 15.6 million.

de la Cruz said globe has 36.5 million subscribers composed of 34.5 million globe and tM prepaid subscribers, and 1.98 million postpaid subscribers.

“despite the unprecedented avalanche of ICt users we have yet to have a truly world-class ICt service infrastructure as evidenced by poor abysmal Internet speed,” de la Cruz said.

Recent study showed that the country’s actual speed never reaches the advertised speed; speed performance declined for all Internet service providers year after year and Filipino Internet subscribers pay more for less every year.

the study said the country’s Internet is run by two major operators that control infrastructure and pricing. It also suggested that the government should encourage more competition in the market and invest in more infrastructure. PNA

In a news conference at the House of Representatives, TMAP President Terence Conrad Bello said the proposal should be passed to increase the take-home pay of Filipino workers. “While compromise proposal involving only the updating of the tax brackets is not what TMAP and its coalition partners had in mind, TMAP believes that the compromise proposal will im-mediately alleviate somehow the plight of salaried individuals who are ‘overtaxed’ under the current system,” Bello said. He added that the TMAP and the 21 foreign business groups,

professional organizations, and trade and labor groups have sub-mitted a proposal adjusting the levels of taxable income to inflation to Speaker Feliciano Belmonte Jr. Under their proposal, which is similar to the proposal raised by House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina City, the seven new tax brackets are: Those earning not over P22,000 will pay a fixed tax rate of 5 percent; Those earning over P22,000 but not over P66,000 would pay a fixed tax of P1,100 with an additional 10 percent of the excess over P22,000;

Those earning over P66,000 but not over P153,000 would pay a fixed tax of P5,500 with an ad-ditional 15 percent of the excess over P66,000; Those earning over P153,000 but not over P307,000 would pay an excess tax of P18,550 with an additional 20 percent of the excess over P153,000; Those earning over P307,000 but not over P547,000 would pay a fixed tax of P49,350 with an ad-ditional 25 percent of the excess over P307,000; Those earning over P547,000 but not over P1.095 million would pay a fixed tax of P109,350 with an additional 30 percent of the excess over P547,000; and Those earning over P1.095 million would pay a fixed tax of P273,750 with an additional 32 per-cent of the excess over that amount. “We voiced our support for various income-tax reform meas-ures then pending in Congress to restore fairness in the Philippine tax system and make our country competitive with our Asean neigh-bors,” Bello said. Included to the foreign cham-bers who have expressed support to the proposal are the European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry, Canadian Chamber of Commerce of the Phil-ippines, Korean Chamber of Com-merce of the Philippines and the Australia-New Zealand Chamber of Commerce of the Philippines.

Moreover, Bello also expressed hope that this proposal will be passed before the 16th Congress ends next year. “Despite popular support from taxpayers and from the Senate and the House of Representatives Ways and Means Committee lead-ership, it seemed that the chances of passing the income-tax reform measure then pending were slim to none, without the support from the President,” he said. In September Malacañang, tak-ing the cue from the Department of Finance, already rejected the pas-sage in Congress of a long-pending bill lowering individual and corpo-rate income-tax rates, saying the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.” Belmonte has said that he and Senate President Franklin Drilon are set to meet soon with President Aquino to convince him at least on the proposal adjusting the levels of taxable income to inflation. Quimbo, for his part, admitted that only the proposal adjusting the levels of taxable income to inflation is viable considering the remain-ing session days of Congress and the position of the Palace against lowering income-tax rates. The finance department, mean-while, said adjusting the levels of taxable income to inflation may cause the government to lose reve-nues totaling as much as 1.5 percent of the country’s GDP, or P30 billion.

tMap, 21 groups back proposal adjusting income tax to inflation

The Tax Management Association of the Philippines (TMAP) and 21 foreign business

groups, professional organizations, and trade and labor groups on Wednesday asked the leadership of the house of Representatives to pass the measure adjusting the levels of taxable income to inflation as compromise to the proposal lowering income- and corporate-tax rates strongly opposed by the Palace.

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phThursday, November 5, 2015

By Jovee Marie N. dela Cruz

MOSCOW—German scholars warn that if carbon emissions in the atmo-sphere aren’t reduced immediately worldwide, a series of “unstoppable” events will be triggered: a dramatic rise in sea levels and the total anni-hilation of coastal cities inhabited by millions of people.

The man-made “destabilization” of some of Antarctica’s most “vulner-able” areas may lead to catastrophic consequences for the whole world, according to a new report from scholars at Germany’s Potsdam In-stitute for Climate Impact Research, published in the Proceedings of the National Academy of Sciences.

According to the study, the Amundsen Sea area in West Antarc-tica appears to be “the first element in the climate system about to tip,” which may be the catalyst to a series of irreversible events spanning the next “thousands of years.”

“[I]f the Amundsen Sea sector is destabilized, then the entire marine part of West Antarctica will be discharged into the ocean,” the study asserts.

The discovery of nine new is-lands near Novaya Zemlya in the Arctic has increased Russia’s terri-tory by 10 square kilometers, said Igor Naumov, the head of the Rus-sian Navy’s hydrographic service, following the result of a Northern Fleet Arctic expedition, Russian newspaper Vzglyad reported.

The outcome of that discharge—the rise in global sea levels of up to 3 meters—promises to be catastroph-ic. The world’s population, the paper reads, would have to adapt to an entirely new global environment: coastal-protection measures like “building or rebuilding or raising of dikes, the construction of seawalls, or the realization of landfills in the hinterland” would become essential for saving cities and their cultural heritage globally.

What’s more threatening, how-ever, is that we are witnessing the

THE information-technolo-gy (IT) services industry, a subsector under the infor-

mation technology and business- process outsourcing (IT-BPO) in-dustry, is poised to notch at least a 20-percent growth this year on the back of continued growth of IT-BPO firms and an increase of local technology start-ups.

Jonathan de Luzuriaga, pres-ident of the Philippine Software Industry Association (PSIA), also said he sees the subsec-tor to increase its employees, from the current count of al-most 88,000 full-time workers to breaching the 100,000 mark by the end of the year.

“The growth for the IT services has been averaging 20 percent in the past years and this year, it’s already a given, and we’re actually trying to stretch that a little bit fur-ther this year,” Luzuriaga said in a chance interview, adding that the IT services subsector has been out-pacing the entire IT-BPM growth.

While not disclosing a specific 20-percent growth rate target, Luzuriaga noted that prospects are bright considering that the bigger players in the technology services landscape continue to expand along with the budding start-up community.

In 2014 the Philippines’s tech-nology services industry grew by 20 percent over the year before, raking in $2 billion in revenues, the second-highest growth among the IT-BPM subsectors. This growth was credited to the diversification of services by global in-house cent-ers (GICs), and the growth of an IT service activity, information-tech-nology outsourcing (ITO).

ITO is the subcontracting of

IT management, such as software development and programming.

Despite the revenue haul of the subsector in the Philippines, the $2-billion revenue was only 2 per-cent of the global industry’s worth.

Growth was fueled by the de-mand from the US, Europe and the so-called Apac region, which includes New Zealand, Australia, Japan and South Korea.

Moreover, despite a global con-traction of 30 percent to 33 percent in the technology services delivery, the Philippines and India have managed to buck the trend because of sustained attractiveness of the two locations for IT-BPM.

“The bigger players are becom-ing bigger and it’s not difficult to convince the IT sector, as well as other GICs, to be serviced from the Philippines. There is also that start-up community that may not be contributing a lot in terms of headcount, but in terms of revenue, are generating intel-lectual property revenue because they’re developing products now,” Luzuriaga added.

To capitalize more on this fledg-ling community, the industry is one with the Information Com-munication Technology Office, under the Department of Science and Technology (DOST-ICTO), on the Philippine Start-Up Challenge.

The competition caters to tech-savvy college students, and is aimed at spurring innovation by encouraging them to develop software that can later be devel-oped as viable businesses.

The DOST-ICTO and the PSIA crafted a Philippine Digital Start-Up Roadmap that aims to raise the current base of start-ups now from 100 to 500 by 2020.

information-tech services industry sees at least 20-percent growth this year

‘Melting Antarctic ice could trigger global catastrophe’

start of that process right now, and it is quite difficult to predict how the situation will unfold in the near future, Johannes Feldmann, lead au-thor of the paper, pointed out.

“What we call the eternal ice of Antarctica unfortunately turns out not to be eternal at all. Once the ice masses get perturbed, which is what is happening today, they respond in a nonlinear way: there is a relatively sudden breakdown of stability af-ter a long period during which little change can be found.”

There are some scholars chal-lenging the German researchers’ study, pointing out that it is not yet clear whether the process will develop exactly as they’ve laid out in the paper.

For instance, Jonathan Bamber, a glaciologist at the University of Bristol, told the Washington Post that “how quickly we reach this point of no return, and how rapidly it proceeds,” is yet to be determined, and we may have some time to at-tempt to solve the problem.

“[T]he next few decades will de-termine whether the [West Antarc-tic ice sheet] is just endangered or on its path to extinction.”

The recipe for saving the world, as suggested by the study’s team, is simple, but measures are needed to be taken right now. Anders Levermann, co-author of the paper, stressed that carbon reductions must be imple-mented urgently, as sea-level rise is imminent, and with it the demolition of “future heritage by consuming the cities we live in.” PNA

italpinas all set for i.p.o. Executives of property developer Italpinas Development Corp. (IDC) inform the media that the company is ready for its initial public offering (IPO) at the Philippine Stock Exchange (PSE). Italpinas Head of Corporate Affairs Lorenz Ziller (from left), vice president of Italian Chamber of Commerce in the Philippines; Chairman and COO Arch. Romulo Nati; lawyer Jose Leviste III, Italpinas president; and Leonardo Arguelles Jr., managing director of Equity Capital Markets and Unicapital Inc., the IPO’s issue manager and lead underwriter, field questions at the news conference on Wednesday at Romulo Café in Makati City. IDC, a sustainable real-estate firm, is looking to tap the financial market to fund its building projects in various emerging cities nationwide. The company aims to offer 57.62-million shares to the public at P4.20 per share price offer, to raise P242 million by listing at the Small, Medium and Emerging Board of the PSE. Story on B2.