Continued on A2

See “Budget,” A8

PESO ExchangE ratES n US 47.1120 n jaPan 0.3821 n UK 70.8988 n hK 6.0793 n chIna 7.3518 n SIngaPOrE 33.5078 n aUStralIa 34.2185 n EU 51.0411 n SaUDI arabIa 12.5599 Source: BSP (8 December 2015)

www.businessmirror.com.ph n Thursday 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 7 sections 32 pages | 7 days a weekn wednesday, december 9, 2015 Vol. 11 No. 62

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

2015 EnvIrOnmEntal lEaDErShIP awarD

UnItED natIOnSmEDIa awarD 2008

China Ends Japan dominanCE of asia’s high-TECh ExporTs»a8

₧3-T 2016 budget up for ratification

special report

iNsiDe

huawei mate s

ingrid bergman

sm seaside city cebu

cybErattacKS vS Phl ‘accElEratIngat fUll SPEED’

life d3

life d1

properTy e1

Clark holds key for PHL to reap rewards of ballooning air traffic

© 2009 MCTSource: CERT Coordination Center Software Engineering Institute

Internet terrorism

CLIENT

Normal internet connectionClient and server exchange a set sequenceof messages to make a connection

Overwhelmed by too many “half open” connections, the targeted server isunable to acceptincoming calls

SERVER

1 “Ping,” a signal betweencomputers

2 Server acknowledges client by sending a signal back to client

3 Client finishes establishingconnection by responding

One-to-one denial-of-service attackCreating “half open” Internet connections

HACKERCOMPUTER

TARGETEDSERVER

HACKERCOMPUTER

TARGETEDSERVER

1

If pings lie about their real address,the targeted server can’t return thesignals to make the connection;it waits a while, then gives up

1 Sends series of “pings”

1

1

Distributed attacksTens of thousands of pings sent from “zombie” computers takenover by single hacker or hackers from a remote location

2

2

2

2

Zombie computers

How hackers perform “denial-of-service attacks,” which are designedto do anything from disrupting Internet service to crashing servers:

$10-M roro starlite ferries’s MV Starlite Pioneer roll-on, roll-off (roro) ship, currently docked at pier 13, south Harbor in Manila, is the country’s first Japanese-made commercial vessel worth $10 million that will ply the Batangas-Caticlan route. The most expensive ship ever to commercially sail domestic routes is one of the six orders from Japan to replace 20-year-old roros. ROY DOMINGO

By Roderick L. Abad

THE Philippines is fast becoming a main target of cyber felons, inching up in the recently published Third Quarter (Q3) IT Threat Evolution report of Kaspersky Lab.

Using statistics from the Kaspersky Security Network (KSN)—which gathers information from millions of Kaspersky Lab product users in 213 nations—the study revealed that the country is now the 33rd most attacked in just three months, from July to September, from 43rd place during the second quarter. The international security report, likewise, showed that the number of Filipino users infected by malicious programs de-tected by Kaspersky Lab products increased from 15 percent to

See “Cyberattacks,” A8

By Lorenz S. Marasigan

Conclusion

Developing the Clark international Airport as a premier global gateway is a shared responsibility—meaning

there should be concerted efforts and coor-dination between the government and the private sector—as its success would mean the decongestion of the ninoy Aquino inter-national Airport (naia), a development that would be felt across sectors.

Aside from developing land transporta-tion, developing a new runway and building support infrastructure, government agencies must also open satellite offices near the area to make the processing of travel documents for overseas Filipino workers faster. “Most of the passengers [who] fly out of Clark are overseas workers. We wanted the support of the philippine overseas em-ployment Administration and the overseas Workers Welfare Administration for them to have satellite offices here at Clark,” Clark

international Airport Corp. (Ciac) president emigdio p. Tanjuatco iii said. Cebu pacific Spokesman paterno S. Mantaring agreed, saying that this takes away the pain of traveling to Manila that passengers from the north have to expe-rience just to process their papers. “Relevant agencies have also discussed the need to establish a one-stop government center in Clark, to provide easy access to basic government services for air passengers, espe-cially overseas Filipino workers,” he said.

Mantaring added: “This will ensure that passengers departing out of Clark would be able to secure all necessary requirements or permits for domestic or international travel without delay, while guests arriving in Clark for business or leisure would be able to continue with their onward flights, i.e., via Manila, at the soonest possible time.” ‘no cure for naia’loCAl carriers must also be willing to give Clark a second chance, as this would eventu-

ally entice passengers to use the airport and fill the gap between the supply and demand. To do this, the government may dangle incentives to airlines that are willing and able to move out from the naia to Clark. “Clark can accommodate at least an ad-ditional 100 weekly flights today, which can double every year and handle all flight frequencies in five years in a phased transfer of international flights during the period. The airport and transport authorities can

By Jovee Marie N. dela Cruz 

The congressional bicameral con-ference committee has finished deliberations on the 2016 General

Appropriations Act (GAA), with the ratification of the proposed P3.002-trillion national budget expected today (Wednesday).

“Congress will ratify the budget on Wednesday and will immediately trans-mit to president Aquino for signature,” House Majority leader neptali M. gonzales ii said.

Ratify ing the p3.002-tr i l l ion budget, which nearly doubles the 2010 nat iona l appropr i at ions, would allow the Aquino adminis-tration to keep its streak of having

no reenacted budget. The amount is also 15.2 percent more than the 2015 appropriations, and represents the highest budget increase in the last six years. liberal party Rep. isidro T. Ung-ab of Davao City, chairman of the Committee on Appropriations, said that of the p3.002-trillion national budget, the new general appropria-tions amount to p2.139 trillion, con-sist of p2.071 trillion in programmed new Appropriations and p67.5 bil-lion in Unprogrammed Appropria-tions, which may only be utilized if revenues exceed targets,2 or if new loans are secured.

Continued from A1

news@businessmirror.com.ph BusinessMirrorWednesday, December 9, 2015 A2

BMReportsClark holds key for PHL to reap rewards of ballooning air trafficmandate this in an official air-transportation policy that they may enunciate. Although they need much political will to do it,” said Avelino L. Zapanta, an aviation expert . “They can dangle incentives to the first airlines to volunteer to transfer.  Many would soon be willing to transfer anyway rather than not be able to expand services in Manila.” The five-year phased transfer will require at least six things, he added. “Clark needs a fourth terminal, the one they have already in blueprint that can handle 80 million passengers a year, which will make Clark an aerotropolis; a third one for low-cost carriers had been approved and is supposed to commence construction in 2016,” he said. He added that the airport needs a third runway at the opposite side of the aerodrome to allow simultaneous take-off and landing of wide-body aircraft, and also to allow the Airbus A380s to operate there. The third requirement is the construction of a high-speed railway line that will connect Clark and Naia to allow for connecting flights. “Fourth is to encourage the operation of helicopter city hopper to connect Clark, par-ticularly with Metro Manila, so that high-end passengers would have an alternative faster transfer service; business executives can even be arranged to land on top of the high-rise building they’d go to in the cen-tral business districts,” Zapanta said. The last two are the establishment of terminals for buses, rent-a-car services, and limousine transfers; and the strengthening of domestic-to-international transfer services. “Whether we like it or not, Clark will be-come an international gateway because there is no cure for the congestion of Naia except Clark,” he said. Building high-speed railwayTr ANsporTATioN secretary Joseph

Emilio A. Abaya said these recommenda-tions are currently being looked at by his agency. The general direction for Clark, according to him, is for the government to improve its capacity to accommodate further growth. “The National Economic and Develop-ment Authority Board approved the Clark international Airport New passenger Ter-minal Building project last september. right now, we are about to bid out the de-tailed engineering design for the develop-ment of this passenger terminal building. This project is part of the Clark master plan, which was developed by Aéroports de paris,” he said. The new terminal will be done in three phases: the first phase will have an annual passenger capacity of 3 million. it will then be increased to 5 million during the second phase, and eventually to 8 million in the final phase. Abaya added that the government is also trying to address the need for faster connectivity by constructing a high-speed railway that will connect the northern and southern Luzon. “in terms of accessibility, there is a long-term plan to extend railway operations in the north through the North-south rail project. phase 1 will be the p171-billion Japan inter-national Cooperation Agency (Jica)-official Development Assistance project that will connect Metro Manila to Malolos in Bula-can; and phase 2 will be handled by the Bases Conversion and Development Authority that will connect Malolos to Clark international Airport,” he said. This, however, will come only in the next five years, according to a timeline provided by Abaya’s office. Clark vs SangleyWHiLE Clark has been perceived as a Band-Aid solution for Naia’s woes, the development of a new airport based in sangley point in Cavite is seen as the long-term answer to

the chronic mess at Manila’s main gateway. The transportation department recently received a pre-feasibility study from the Jica that lists the possible locations of the new air-port. The study pinpointed two Cavite-based locations, called sangley 1A and 1B. As to the official location that will be endorsed by Jica, the transport chief can only speculate. Whichever the site will be, the statesman noted, however, his camp will be forwarding it to the country’s chief economic-planning body, the National Economic and Develop-ment Authority (Neda) Board. sangley 1A is in the same site as the naval station in Cavite. The other one is near the central Manila Bay, between the military base and a reclaimed area. The first option will cost both the gov-ernment and a private-sector partner less than the second choice. The first one only costs $10 billion, while the other is pegged at around $13 billion. The future airport will boast of four run-ways, which can handle 700,000 aircraft movements per year. it will have a rated ca-pacity of 130 million passengers annually. The deal is expected to be implemented under the government’s key infrastructure program, mixed with funding from official development assistance. Commercial opera-tions of the new air hub should start by 2025, just about 10 years from now. “sangley came up only with Abaya appar-ently because it is in his district in Cavite. Clark has always been the subject of devel-opment since Fidel V. ramos’s time. i prefer Clark. sangley’s reclamation need is huge and will impede commercial shipping traffic in/out Manila Bay, among many other disad-vantages,” Zapanta said. philippine Airlines president Jaime J. Bautista added that given the amount of time that the government needs to con-struct a new airport, it is but wiser to con-sider Clark first before sangley. “sangley is a good plan. But it will take

time, right? it will take about 10 years to 15 years to be completed. in the meantime, let’s fix Clark first,” he said. For his part, Cebu pacific’s Mantaring said his camp is more excited with the soon-to-be-built sangley Airport. “To cater to travelers used to Manila, it would be ideal to develop a new airport closer to the capital city, while forging ahead with the continuous development and im-provement of Naia. in particular, Cebu pa-cific looks forward to the optimization of the Naia runways with the development of rapid exit taxiways, which will allow up to two more aircraft movements per hour and significantly reduce consequential flight delays,” he said. He added: “Cebu pacific also highly an-ticipates the commencement of air-traffic navigation services from British firm Nats services Ltd., which aim to boost hourly air-traffic movements to 60 from its current 40 limit. Naia and sangley point remain more accessible to travelers from Manila, and would greatly benefit from the government’s proposed expansion projects.” Triple airport strategyAMEriCAN Chamber of Commerce senior Advisor John D. Forbes and European Cham-ber of Commerce of the philippines External Vice president Henry J. schumacher both agreed that developing Clark instead of sangley is the best option for the philippines. “We support the dual-airport policy. Clark has been marginalized for two decades. With Naia now at capacity, the government must be more serious about using Clark,” Forbes said. “sangley and any other Naia replacement is unlikely for 15 years. Unless Clark and other international airports are used more, tour-ist arrivals cannot meet targets.” The dual-airport strategy calls for the simultaneous development of both Clark and Naia. “We support the dual-airport strategy. We believe budget f light, including part

of Cebu pacific, should be moved to Clark. This will require a fast transit bus or rail system. if it will work on Edsa from Que-zon City to Makati, the bus transit could be extended to Clark,” schumacher said. But for philippines AirAsia president Joy D. Cañeba, there is no reason for the govern-ment not to develop both airports at once. “Clark is already a viable airport. Let’s develop this first; but there is no reason for us to develop only one or two major airports as the demand for air travel has grown ex-ponentially and the growth is forecast to continue with increasing low-cost airline operations and the expanding middle class and the philippines is losing opportunities if we do not start building, expanding and improving airports now,” she said. The transport chief, for his part, said the government will be keen on developing all three airports to reap the benefits of the ballooning domestic and international traffic volumes. “The government is developing Clark and is, likewise, going to develop a new Manila international airport. The short- to medium- term plan is to develop Naia via public-private partnership to expand its capacity in order to meet projected throughput until 2037, which is estimated at 51.4 million passengers per annum. The proposal is for a 15- to 20-year concession under an operate-rehabilitate-add-transfer scheme at an estimated cost of over p120 billion,” he said. This project, expected to be complet-ed by 2017, is still for the approval of the Neda Board. “We are developing Clark by building a new passenger terminal building, which will eventually increase its capacity to 8 million passengers annually. in the long term, Jica is finishing its site-location study on the new Manila international Airport,” he said. But with all these only expected to be com-pleted in a matter of decades, the philippines will continue to lose its potential passengers to its neighbors in the region.

SC Spokesman Theodore Te an-nounced that the Court, during its regular en banc session, agreed that the Comelec had given voters sufficient time to register for next year’s elections. “Finally, the Court also noted that the Comelec had given vot-ers sufficient time to file their applications for registration [from May 6, 2014 to October 31, 2015], but these voters failed to do so for causes not attributable to the Comelec. Petitioners had not given any justifiable reason for failing to register within the prescribed period and also for waiting until the last minute to file their appli-cation,” the SC said. In its petition, the Kabataan Party-list group sought the nul-lification of the Comelec Resolu-tion 99853, dated February 19, 2014, and Resolution 9981, dated August 18, 2015, both of which fix the deadline of application of registration of voters on October 31, 2015, which is more than two monts earlier than what Republic

Act 8189, or the Voter’s Registra-tion Act of 1996, provides. The petitioner noted that the Voter’s Registration Act clearly states that the personal filing of application of registration of voters shall be prohibited only during 120 days before a regu-lar election and 90 days before a special election. Thus, the petitioner said the deadline of application of regis-tration of voters should still be on January 8, 2016, and not on October 31, 2015, which is 69 days earlier than is prescribed by the statute. But, the SC agreed with the

By Butch Fernandez

PRESIDENT Aquino hosted an extended lunch for lawmakers at Malacañang’s Heroes Hall on

Tuesday, as the Palace moved to muster congressional support for quick pas-sage of several pending administration bills including the P3-trillion 2016 national government budget and the Bangsamoro basic law (BBL) before the Senate and the House of Representa-tives go on recess on December 18. Malacañang also tried to marshall majority backing for the restoration of the P8-billion slashed funding for the conditional cash transfer (CCT) doleout scheme implemented by the Department of Social Welfare and De-velopment. Related story on page A4 This developed as Presidential Communications Secretary Hermin-io B. Coloma Jr. clarified that Ma-lacañang was banking on lawmakers to reverse the congessional action de-leting the P8-billion allocation in the 2016 budget bill for the CCT doleouts. “We trust that our legislators will consider the implications of their de-cisions on the CCT beneficiaries, who are the most important stakehold-ers, in our efforts to achieve inclusive growth,” Coloma said. He was prompted to clarify the President’s position when asked if the Palace would move to restore the P8-billion CCT funds deleted by the lawmakers earlier. “We shall await the outcome of the deliberations of the bi-cameral conference committee on the matter,” Coloma added. Once the Senate and House panels hammer out a final version reconcil-ing conflicting provisions in the 2016 budget bill, the approved money meas-ure will be submitted to Malacañang for the President to sign into law, which President Aquino aims to do before the year-end to maintain a record of gov-ernment not operating on a reenacted budget the past five years.

By Marvyn N. Benaning Correspondent

MEMBERS of the Kabataan party-list group on Tues-day morning picketed to

the main office of the Commission on Elections (Comelec) in Intra-muros, Manila, to protest the poll body’s claim that the 2016 elections may be delayed. In a statement, Kabataan said that by doing so, “the Comelec is blackmailing the Supreme Court [SC] to scrap the temporary re-straining order [TRO] it had slapped against the ‘No Bio, No Boto’ policy pursued by Comelec Chairman Andres D. Bautista.” The TRO was won by Kabataan on November 25, with the Court giving due course to its petition to declare Republic Act (R A) 10367, or the Mandatory Biomet-rics law, and its implementing guidelines, unconstitutional. “The Comelec is actually black-mailing the SC into lifting the TRO —not by arguing on legal grounds —but by spreading fears of delays in the coming elections, up to a point of even raising fears of a ‘no-election or no-el’ scenar-io,” Party-list Rep. Terry Ridon of Kabataan argued. “All we are asking is for the Comelec to abide by the Consti-tution. However, the Comelec is using the no-el card to cover up

its refusal to abide by the Consti-tution,” said the lawmaker, who is the lead petitioner in the No Bio, No Boto case. In the said 32-page petition, petitioners argued that RA 10367 and its implementing regulations are unconstitutional, as these impose an unconstitutional, ad-ditional substantive requirement for the exercise of suffrage, thus, violating Section 1, Article V of the 1987 Constitution. Moreover, Ridon also belittled the Comelec’s defense that the bio-metrics registration will ensure clean and honest elections, point-ing out that even Bautista himself had previously admitted that a hard copy of the voters’ list will be used to validate voter information at precincts for the 2016 polls. “Even if the SC were to lift the TRO, we will still be stuck with a biometric system that doesn’t actually serve its purpose. The Comelec has already admitted that they can’t implement No Bio, No Boto as the poll body plans to use old Book of Voters to verify iden-tities,” Ridon explained. Bautista earlier said that a digit-al voter-verification system, which includes an electronic scanner for validating fingerprints, is “a want rather than a need.” “In other words, the Comelec itself defeats the sole purpose of biometrics registration by opting

for a manual verification process instead of biometric voter authen-tication,” the lawmaker added. Ridon also pressed the Come-lec to explain in detail what hap-pened to the more than 2 million voter-biometrics data stored at the central office of the commis-sion that were confirmed to have been corrupted. “If the Comelec stands by its biometric validation so much that it even has the gall to black-mail the SC, then how can it ex-plain the fact that there were millions of biometric data that were corrupted? We need to ask: Whatever happened to the cor-rupted voter records? Was the Comelec hacked? Intentionally deleted? Tampered? How can it ensure the integrity of biomet-ric data if such an incident has already occurred?” Ridon asked. “The Filipino people should not be blinded by the Comelec’s prom-ise of clean and honest elections through the biometric system. In fact, we can consider it as a sham and a scam. The No Bio, No Boto may, in fact, prove to be a Pando-ra’s box that hides insidious plans for massive electoral fraud. Add to this the doubts and controversies hounding the new optical mark reader machines, and we’ve got an electoral system highly vulnerable to fraud hiding under the mantle of automation,” Ridon warned.

TWO legal experts on Tuesday agreed that the forfeiture case filed against Vice President Jejomar C. Binay is covered by

the one-year filing ban under the Republic Act (RA) 1379, the law on forfeiture of illegally ac-quired properties of public officials. Former law deans Amado Valdez of the University of the East and Pacifico Agabin of the University of the Philippines both cited Section 2 of RA 1379 that specifically states that a forfeiture case may only be filed against a public official or employee “provided that no such petition shall be filed within one year before any general elections or within three months before any special election.” “It ’s true that forfeiture cases can’t be filed against public officials within a year before general elections,” Valdez, who is also president of the Philippine Association of Law Schools and founding president of the International Association of Constitutional Law, said. “Also, no judgment could be rendered on forfeiture within six months before general elections,” he added. Asked what could have been the purpose of RA 1379’s crafters when they included the one-year ban in the law, both Agabin and Valdez gave the same response. “The purpose of the prohibition is to avoid political persecution,” Agabin said. Valdez, for his part, said: That portion of the law was made, perhaps, in order to prevent harassment and ensure a level play-ing field.” The legal experts’ statements came on

the heels of a forfeiture case filed in Novem-ber by the Anti-Money Laundering Council (AMLC) before Branch 57 of the Regional Trial Court (RTC) in Manila against the bank accounts of 63 corporations and individuals, including a lone Binay bank account. Valdez said that even the AMLC is covered the one-year filing ban and should not have yet moved for the forfeiture of Binay’s bank account so close to the 2016 national elections. Valdez expressed belief that the Manila court should stop its proceedings on the AMLC petition until after elections in line with thre provisions of RA 1379. The AMLC petition was filed on Novem-ber 12, a day after the lapse of the original six-month freeze order on the alleged assets of Binay and members of his family that was filed on May 11. Based on the AMLC petition, the RTC in Manila issued a 20-day Provisional Asset Pro-tection Order (Papo) the following day, on November 13, on several accounts, including Binay’s account that contained P1.7 million. The Binay camp earlier said that the order was not a determination of the truth on the allegations against the vice president. Binay has, likewise, vowed not to touch the assets that are subject of the Manila court’s Papo. Apart from RA 1379, the Binay camp had, likewise, cited Section 16 of the Anti-Money Laundering Act, which states that “no case for money laundering may be filed against and no assets shall be frozen, attached or forfeited to the prejudice of a candidate for an electoral office during an election period.” Joel R. San Juan

Editor: Dionisio L. Pelayo Wednesday, December 9, 2015 A3BusinessMirror

The Nation

ACTIVISTS ASSAIL COMELEC FOR ‘BLACkMAILINg’ SC ‘Forfeiture case vs Binay covered by one-year ban’

Supreme Court junks pleato reopen voter registration

By Joel R. San Juan

THE Supreme Court (SC) on Tuesday junked the petition filed by Party-list Rep. Terry

Ridon of Kabataan seeking to compel the Commission on Elections (Comelec) to reopen the registration of voters for the 2016 elections.

Comelec that the 120 days is not the reckoning point for determin-ing the last day for filing of appli-cations for registration because the law providing for the 120/90 day periods only determines when registration is no longer allowed. “It does not mandate that the pe-riod for registration should be up to that time,” Te noted. The Court also agreed with the Comelec that it is allowed the lengthen the 120 and 90 day peri-ods of “no registration” on account of administrative necessities and other exigencies. “The Court noted that there are certain preelection acts that are dependent upon the comple-tion of registration, and that re-quiring the Comelec to extend the period for filing applications for registration will gravely affect its rigid and strict timeline. Major changes to the Comelec’s time-line, like an extension for filing applications, can no longer be permitted at this point without jeopardizing the entire prepara-tion for the 2016 elections,” Te told reporters. The youth party-list group ear-lier managed to secure a temporary restraining order (TRO) enjoining the Comelec from implementing its “No Bio, No Boto” policy, requiring all voters to register biometrics before they would be allowed to participate in next year’s national and local elections. The No Bio, No Boto policy pro-vides for disenfranchisement of voters without digital photograph, signature and fingerprints in their registration records.

By Rene Acosta

DEFENSE Secretary Voltaire T. Gazmin and Interior Sec-retary Mel Senen Sarmiento

have been going around police and military camps across the country to personally assess the government’s security preparations for next year’s presidential elections. The Department of National De-

fense (DND) said the two officials are undertaking the joint area visits around the country also as part of the year-end inspection to boost the morale of policemen and soldiers. It said the visits were being car-ried out to emphasize to the troops the importance of the military’s and the police’s nonpartisanship in the elections. O n Tuesd ay Ga z m i n a nd

Sarmiento visited the headquar-ters of the Armed Forces Central Command and the police offices in Cebu after talking with policemen and soldiers in Palawan on Monday. Last week the two officials also visited Southern and Northern Lu-zon during which they reiterated the standing orders for the troops to remain apolitical while intensifying the counter-terrorism operations.

In their visits to police and mili-tary camps, Gazmin and Sarmiento stressed to the security personnel to allow the electoral process to run its course, while ensuring maximum security for the country. “The two secretaries also under-score the necessity of interoperabil-ity between the military and police in conducting their joint missions, in order to protect and serve our

people in a better capacity,” the DND statement added. N e x t w e e k G a z m i n a n d Sarmiento are scheduled to visit Central Mindanao and Zambo-anga Peninsula. Aside from reminding policemen to stay neutral during the elections, Sarmiento was also taking the occa-sion to distribute patrol jeeps to local police units.

Gazmin, Sarmiento visit camps in preparation for ’16 elections

Aquino makes pitch for favorite bills

TE: “It does not mandate that

the period for registration should be up to that time.”

BusinessMirror news@businessmirror.com.ph A4

Economy

The chief of the state-run port body has tendered his resig-nation, saying in his letter to

President Aquino that he will return to the private sector after five-and-a-half years of government service.

Philippine Ports Authority (PPA) General Manager Juan C. Sta. Ana handed his resignation to the Presi-dent through Transportation Sec-retary Joseph emilio A. Abaya on December 4.

he will leave his post by end-De-cember, explaining that his move to resign was due to his decision “to return to the private sector.”

The port chief did not specify which company he will be joining. Before joining the PPA in 2010, Sta. Ana was senior vice president of FF Cruz & Co. Inc., one of the largest construction companies in the country.

Sta. Ana has been contemplating of resigning from his post to rejoin the private sector a few months ago.

he just “held on to the post to finish the PPA pending organiza-tion plan and placement of em-ployees, as well as wound up his international commitments.”

“With all these commitments almost done, I think I could already go and return to the private life," Sta. Ana said.

In the last five years, the port chief focused on good-governance issues, among others, simplifica-tion of business processes in ports to make it easy for the public to transact business and transparency in corporate governance.

he also pushed for port mod-ernization in various gateway projects, port efficiency and pro-ductivity in the handling of car-goes and connectivity.

Under his watch, the Govern-ance Commission for Government-Owned or -Controlled Corporation elevated the PPA status to first-class government corporation.

Based on 2014 Commission on Audit Report on the PPA’s Financial Statements, its assets are valued at P114.53 billion and its audited rev-enues for the years 2012, 2013 and 2014 enormously increased to P10.4 billion, P11.7 billion and P13.2 bil-lion, respectively, noting very sig-nificant and commendable increases in the last five years. Lorenz S. Marasigan

According to Social Welfare Sec-retary Corazon J. Soliman, the re-duction in the budget is “unaccept-able” and will be affecting directly the beneficiaries of 4Ps.

“We cannot accept the reduction in our budget; more so that it will be taken from the cash grants for Pan-tawid Pamilya beneficiaries,” Soliman said in a news statement.

“Just this morning, our Depart-ment was made aware of a Senate-

initiated cut of P8 billion in the cash grants for Pantawid Pamilyang Pilipi-no Program beneficiaries in our 2016 proposed budget,” she said.

“This was made despite the fact that the Senate has approved our budget proposal in the budget plenary session in November, without deductions. In fact, they even put in additional funds to our Social Pension and Supplemen-tary Feeding Programs so we can cover more indigent Filipinos in need of gov-

ernment support,” the DSWD chief added. Soliman said that senators Vicente Sotto III, Juan Ponce enrile and Loren Legarda, the proponents of the cut, should explain to more than 15 million Pantawid Pamilya individual beneficiaries their inten-tion in cutting the budget.

She explained that there is an urgent need to restore the original proposed and approved budget in the plenary session in November.

“It has to be put back as the P8-billion deduction means that for two months, 4.4 million households will not receive health and education grants. For two months, 10.2 million children will not be able to go to school to study nor visit a health facility to have their physical fitness checked. For two months, there will be no Family Development Sessions [FDS] that the parents will attend and learn from,” the Soliman pointed out. PNA

Wednesday, December 9, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

PPA’s Sta. Ana quits for private-sector job

Soliman: Senate ₧8-billion budget slash on cash dole-out program ‘unacceptable’

The Philippines on Tuesday pitched the call for an acceler-ated and scaled-up support on

technology development and trans-fer for developing countries to meet carbon emissions-reduction targets. In a news statement, Secretary emmanuel de Guzman, vice chair-man of the Climate Change Commis-sion (CCC) and head of the Philip-pine delegation in the 21st Confer-ence of Parties, lamented the weak progress on the call of support for technology transfer in the current draft of the Paris agreement. “You cannot limit global warm-ing to below 1.5-degrees Celsius if the support is not there,” de Guz-man said. he added that developing coun-tries, like the Philippines, need clear sources of support and assistance from developed countries, not just in the form of finance but also in the crucial areas of technology and capacity-building. For his part, elpidio Peria, lead negotiator on technology transfer, said the Philippines, as well as oth-er developing countries, needs the support of developed nations in the entire cycle of technology develop-ment and operation. “We need support not just in the planning stage but in the actual transfer of technology for the im-plementation of projects that will help us achieve our target of reduc-ing our emissions to below 1.5 ⁰C,” Peria noted. Assistant Secretary Jocelyn Goco, deputy executive director of the CCC, said the lead climate-change body in the Philippines is conducting consultations with all stakeholders to determine all spe-

cific technologies needed to achieve its goals to lower its greenhouse gas (GhG) emissions. For one, she said, the Philippines needs technology to enable it to fully adopt renewable energy and achieve energy efficiency. “Such technology could help us mitigate our emissions from differ-ent sectors, such as the transport sector,” she said. “We also need tech-nology for adaptation and disaster preparedness. Assistance for early warning systems, as well as waste-water treatment, is crucial for us.” De Guzman also urged for transparency on finance for miti-gation, citing that the prevailing draft climate deal has not stat-ed the willingness of developed countries to fund initiatives to help developing countries meet targets for partial contributions. While countries have already pledged their goals for mitigation in their respective intended nation-ally determined contributions, not all have the capacity and resources to take measures to completely meet these goals. “Support is a cross-cutting is-sue. We cannot move for success-ful mitigation and adaptation if the support is missing,” said Dean Antonio La Vina, spokesman of the Philippine delegation in the UN climate-change summit. The necessity of support for mitigation and adaptation has also been cited in the Manila-Paris dec-laration of the Climate Vulnerable Forum (CVF). The Philippines is the current chairman of the CVF, an advocacy alliance of 43 middle-income and small-island developing nations. Jonathan L. Mayuga

Philippines calls for ‘concrete’ support on carbon emissions-reduction goals

The Department of Social Welfare and Development (DSWD) lamented on Tuesday

the Senate-initiated cut of P8 billion in the cash grants for Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries in its 2016 proposed budget.

news@businessmirror.com.ph Wednesday, December 9, 2015 A5BusinessMirrorEconomy

The chairman of the house Committee on Labor on Tuesday re-minded all employers in the country to pay their workers the 13th-month pay before December 24.

National Unity Party Rep. Karlo Nograles, chairman of the panel, said employers are duty-bound under the Labor Code of the Philippines and its implementing rules and regulations to report their compliance with this benefit. “The 13th-month pay must be paid on or before December 24 of every year. The Department of Labor and employment [DOLe] is ready to file cases against companies found violating the law providing the payment of the13th-month pay. You can go to the DOLe, and the agency will immediately file cases against them,” he said. “All employers are required to pay their rank-and-file employees the 13th-month pay, regardless of the nature of their employment, and irrespective of the methods by which their wages are paid, pro-vided they worked for at least one month during a calendar year,” added Nograles, citing the DOLe. The 13th-month pay is defined to mean one-twelfth of the basic salary of an employee within a calendar year. According to the DOLe, the basic salary includes all remunera-tions or earnings paid by an employer to an employee for services rendered, but may not include cost-of-living allowances, profit-sharing payments, cash equivalents of unused vacation and sick-leave credits, overtime pay, premium pay, night-shift differential pay, holiday pay, and all allowances and monetary benefits which are not considered, or integrated as part of the regular or basic sal-ary of the employee. Meanwhile, Labor Secretary Rosalinda Baldoz said that employ-ers may pay their employees one-half of their 13th month benefit be-fore the opening of the regular school year—May or June—and the remaining one-half on or before December 24. If not paid after this date, the 13th month pay becomes due and demandable. Baldoz said that employers who fail to pay the 13th month benefit are liable to money claim cases that aggrieved employees can file with any DOLe regional office. Under the Labor Code, every covered employer is required to make a report of compliance with the law to the nearest DOLe regional office not later than January 15 of each year. Jovee Marie N. dela Cruz

“Consistent with its mandate under the epira [elec-tric Power Industry Reform Act] and Re [Renewable energy] Act, the DOe recognizes that the creation of the Technical Advisory Committee [TAC] and the Modeling Working Group [MWG] will enable VRe in-tegration and installation targets. “This goal shall be achieved through the conduct of a grid-integration study, which will identify the poten-tial grid-reliability—concerns with the scaling of Re, options to improve system flexibility and power sys-tem balance, and new installation and grid-integration targets,” Department Circular 2015-11-0017 stated. The focus of the study will be the Luzon and the Visayas interconnection, where most VRe capacities are installed. Among those involved in the committee include the DOe, National Grid Corp. of the Philippines (NGCP), energy Regulatory Commission, National Trans-mission Corp., National Renewable Board, National electrification Administration, Philippine National Oil Co., Philippine Independent Power Producers Association, Philippine electric Plant Owners Asso-ciation, Manila electric Co., Retail electricity Sup-pliers Association, Re Developers and Associations,

Philippine Rural electric Cooperatives Association Inc., Affiliated Renewable energy Centers, National economic and Development Authority, University of the Philippines National engineering Center and International Grid experts. The composition of the MWG, meanwhile, includes the DOe, NGCP, Philippine electricity Market Corp. and Grid Management Committee. The DOe is mandated by the epira to encourage pri-vate-sector investments in the electric power-sector and promote the development of indigenous and Re sources. “In determining Re installation targets, the DOe deems it necessary to ensure the efficient and effec-tive absorption to the grid of Re generating capacities; evaluate the impacts of increasingly ambitious Re tar-gets; and assess actions to cost-effectively improve the integration of VRe sources into the grid,” the DOe said. Under the National Renewable energy Plan, the DOe aims to increase the country’s renewable-energy generation to 15,304 megawatts by 2030. The DOe has already streamlined the process of Re applications, from two years down to just 45 days, to ensure that Re developers and investors will have an easier time in applying for Re service contracts.

DOE moves to ensure VRE grid integration, meet installation goals

Lawmaker reminds employers to pay workers’ 13th-month pay before December 24

By Lenie Lectura

The Department of energy (DOe) is pooling the resources of industry stakeholders to make sure that variable renewable-energy (VRe) sources are integrated

into the grid, and that the installation targets are met. The Department of Public Works and highways (DPWh) needs a more qualified and well-equipped contractors to carry

out the proposed P357-billion infrastructure projects under the 2016 national spending plan for public infrastructure development. DPWh allocation for infrastructure for 2016 increased by 30 percent, or P84 billion, from the P273.9-billion budget in 2015 as part of the government’s efforts to further boost the infrastructure investment. Public Works Secretary Rogelio L. Singson, in a news statement, said that construction in-dustry in the Philippines has a positive outlook, especially for contractors with Philippine Con-tractor’s Accreditation Board (PCAB) licenses. however, the prospective contractors have to conform to project’s equipment resources, financial and expertise requirements, techni-cal personnel and to demonstrate competence in terms of ability to participate in competitive public bidding, Singson said. Republic Act 4566, otherwise known as the Contractor’s License Law as amended by Presi-dential Decree 1746, provides that no contractor (including subcontractor and specialty contrac-tor) shall engage in the business of contracting without first having secured a PCAB license to conduct business.

Wanted: Competent contractors for 2016DPWh infra deals

Wednesday, December 9, 2015 • Editor: Angel R. Calso

OpinionBusinessMirrorA6

Tasks to pursue before time runs out

editorial

WE take President Aquino’s favorite slogan of daang matuwid seriously. The slogan requires that the President act on a number of cases involving managerial incompetence and

moral deficiency of some of the highest of his appointed officials before his administration disappears from the national scene.

We start with the case of the relief goods, consisting of food packs and sacks of rice, which were buried in Dagami, Leyte, when they should have been dis-tributed to victims of typhoons Ruby and Glenda last year. A responsibility of the Department of Social Welfare and Development (DSWD), the interment was recently discovered by Sen. Ferdinand Marcos Jr. who demanded an im-mediate investigation of the matter. The DSWD expressed readiness to face any external investigation. From whatever viewpoint you look at it, when goods intended for relief of calamity-stricken victims end up being dumped or bur-ied somewhere, somebody is not doing his or her job or is doing it extremely badly. Somebody must answer for it.

Next, this is not a case of negligence but a clear case of corruption, the con-tinuing hocus-pocus being done on land tiles at the Land Registration Commis-sion. Here, land titles change hands without the knowledge of original owners who suddenly find themselves landless, victims of swindlers in cahoots with employees of the Land Registration Authority. The country’s Torrens title sys-tem is being mutilated and rendered completely useless right before our eyes.

Over at the Department of Transportation and Communications (DOTC), not only corruption of a monumental scale but managerial incompetence of mind-boggling dimensions are involved. This pertains to the DOTC’s opera-tion and maintenance of the Light Rail Transit system. The decay of the system and the inconvenience and suffering inflicted on the commuting public can only be attributed to incompetence at the highest level. The billions of pesos lost to relatives in one-sided contracts can only be the result of questionable moral character.

The Ombudsman has filed cases of corruption against officials of the DOTC but it has spared the biggest of them all—Secretary Joseph Emilio A. Abaya himself. Why the blind eye to the secretary? The Ombudsman needs to explain.

Similar accusations of ineptitude and corruption have been leveled at the Department of Agriculture. For that matter, the Department of Budget and Management has been identified as the center of arbitrariness and hypocrisy.

Managerial incompetence and moral deficiency are not specific to the BS Aquino administration. They have plagued past administrations as well, but it is the subtlety of their concealment in the BS Aquino regime that makes them extremely notorious to the public eye.

The present administration has only six more months remaining in office. As it fades into the sunset, it will want to look into these charges of miscon-duct by some of the highest of its officials and dispense appropriate punish-ments in order to strengthen its claims of good governance. That will also save daang matuwid from the fate of all slogans—derision, consignment into the dustbin of history.

IF you are one of those who took advantage of initial public offerings (IPOs) in the mid-1990s and borrowed under the Social Security System (SSS) Stock Investment Loan Program (SILP)

or the SSS Privatization Fund Loan Program (PFLP) in order to buy the shares you wanted, and later forgot about it, now is your chance to clean up your delinquent loan record.

Delinquent stock-investment loan? Read on!

Early this year, the SSS offered the option to sell shares of stock program to members with out-standing loans under the above-mentioned SILP and PFLP. SSS members who are delinquent in the payment of their loans may avail themselves of the option to sell program by opting to sell their

stocks at prevailing market value and then paying their loans from the proceeds of the sale.

Here’s how the program works:A special power of attorney shall

be executed by the member authoriz-ing the SSS to sell the shares of stocks.

The shares of stocks shall be sold by the SSS at prevailing market price.

The net proceeds from the sale shall be applied to the outstanding SILP/PFLP loan balance.

The excess amount, after the ap-plication to the outstanding SILP/PFLP loan balance, shall be applied to other delinquent member and housing loans, if any.

Any excess amount after the ap-plication to other delinquent loans shall be refunded to the borrower.

If the net proceeds from the sale cannot cover the outstanding SILP/PFLP loan balance, the remaining amount shall be paid through deduc-tion from the proceeds of a new sal-ary loan or from the final benefits, such as total disability, retirement and death.

The remaining loan balance shall continue to be charged with interest and penalties until fully paid.

Not a bad deal, isn’t it? You get to pay your outstanding loan without having to shell out money, unless

the present value of your shares of stocks is very much depreciated and not enough to pay your loan.

So why don’t you check this and find out if the shares of stock you bought years ago have ap-preciated in value, or more than enough to pay your outstanding loan and leave you with some to spare dividends. You get to clean up your loan record with the SSS and, at the same time, enjoy some of your realized gains.

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

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

All About Social SecuritySusie G. Bugante

REMEMBER the guy who decided to slash his own salary and pay all his employees $70,000 a year? How could you not? The man has been the subject of more laudatory news

coverage than an Apple device. Conservatives have speculated that he would drive his company into bankruptcy; liberals have speculated that he represents a new, kinder capitalism. Karen Weise of Bloomberg Businessweek dug into the story, however, and found something much stranger.

Paying everyone $70,000? It won’t start a revolution

Weise’s extraordinary reporting should be read in full. Her dogged leg-work revealed that the story of a boss who had an epiphany about the unfair nature of modern labor relations, and instituted a brand-new model in the face of daunting obstacles, including a lawsuit from the brother who owns shares in his firm, may not be exactly what it seems. The lawsuit appears to have preceded the new salary policy, and may have been motivated not by Dan Price overpaying his workers, but by the salary that Price was paying himself, at the expense of his minority shareholder. This raises the possibility that the new pay scale may have been intended in part to spite his brother.

There are a lot of morals buried in this new and more complicated tale. Reporters should never accept at face value the explanations offered for dra-matic and unlikely behavior—such as slashing your own pay, emptying your retirement accounts and mortgaging your home, in order to pay your work-ers more than the market demands. It is unusual for people to sacrifice so much for altruistic ends. However, it is quite common for people to sacrifice

so much to get revenge, particularly on family. (Just ask any divorce attorney.)

That said, even if the motive was mostly spite, that doesn’t necessarily discredit the act. And it’s still a useful real-world experiment. We don’t know what really happened in Price’s case, but it’s a good object lesson. For those of us outside Dan Price’s family, the pressing questions are: Is this a new labor model? Could it work elsewhere?

Recent reporting suggests that Gravity may have actually benefited from the move. While early on it cost the company customers, either be-cause they had political objections to Price’s public statements or because they worried that fees were going to go up, now the salary decision may be helping Gravity.

All that publicity has attracted new customers. And while some employ-ees might leave because they don’t like getting paid exactly the same as coworkers who are less productive, the new pay is probably going to at-tract —and retain—some pretty good workers who don’t care what the guy in the next cubicle is making, as long as they personally can pull in more

than they could elsewhere.So as a labor model for Gravity,

this doesn’t necessarily look bad; Price may have done something good for his workers and good for his company, regardless of whether his heart was in the right place. On the other hand, the upside also illustrates the limits of this approach. A new labor model for Gravity isn’t the same thing as a new labor model for the American economy.

After all, the publicity came only be-cause what Price was doing was so radi-cally different from what other compa-nies do. If every company were doing this, the marketing benefit would be zero. Heck, even if a few companies try to follow suit, the second company is likely to see much less good publicity than the first, and the third will get even less than that. By the time you hit the 10th or 20th company instituting a flat, high salary scale, the benefit in terms of increased sales would prob-ably be close to zero.

Of course, that still leaves the labor side. Couldn’t Gravity see higher prof-its not because publicity attracted new customers, but because the company attracted more productive workers? And the answer is sure—if it’s in an industry where an excellent worker is capable of producing, say, 50 percent higher profits than a mediocre one. I can’t say whether payment processing is such an industry. I can say that this, too, works only if relatively few people are doing it.

Paying your workers more to get more productivity is what economists call an “efficiency wage.” Why are work-ers who get these wages, well, more ef-ficient? There can be multiple reasons:

Paying workers more than other workers in their skill class makes them feel warmly toward you. Humans are hard-wired for reciprocity: When someone gives us something, we feel

obligated to give them something in return. So if you treat your employees extra well, they feel obligated to treat you extra well. Workers know that if they lose this job, they are likely to end up with a job that pays less. They are thus highly motivated to keep this job.

Employers get to be choosier about whom they hire. The wage attracts people with better skills.

What’s notable about all of these effects is that they work only if you’re paying a high wage relative to the rest of the market. It’s all relative. A gar-ment worker from 1900, if transported to a modern Wal-Mart, might be weep-ingly grateful to get such an easy job, in a comfy, climate-controlled place, paying such magnificent wages. That doesn’t mean that a modern worker counts their lucky stars every time they put on that blue smock. These effects are relative, not absolute, so if every-one started paying higher wages, the productivity benefits would disappear.

Now, there is a theoretical way that we have all jobs pay more, and get higher productivity thereby: un-employment could rise dramatically. Low-skilled workers who are apt to be less productive would not be part of the labor pool, and the average productiv-ity of the remaining workers would rise—plus the folks with jobs would probably work harder, because a new job is harder to get if you lose your old one. That’s not exactly a feel-good tale about “kinder capitalism.”

And in the end, neither is the tale of Gravity. A lot of people wanted Price to be a man with a beneficent dream who did well by doing good. They wanted him to be an example for oth-ers to follow. Now it’s not clear that he was primarily trying to do good. And whether or not he did so accidentally, it’s probably not an example that many other companies can profitably follow.

BLOOMBERG VIEWMegan McArdle

Wednesday, December 9, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

One of the biggest cost drivers of wind-energy projects, which has a material impact on the cost per kiloWatt-hour (kWh) of energy produced, is the cost of capital. The

“first come, fi rst served” system of feed-in tariff (FIT) allocation adopted in 2013, while arguably achieving the objective set out by the Department of energy (DOe) at the time of disqualifying the financially weaker players or “flippers” from being awarded allocations, did so at the cost of significantly increasing the cost of capital of the remaining projects. This is because with no certainty of FIT award until commercial operations, projects could not attract the cheapest form of capital (senior bank debt) to fund construction and instead were effectively equity funded.

The DOe and the energy Regula-tory Commission (eRC) have the op-portunity to address this key weak-ness of the first come, first served system by doing two simple things which are contemplated in the cur-rent FIT rules: (1) approve a large enough installation target to miti-gate the risk that any given project will fall outside the current FIT allo-cation and (2) make sure that there is always a new and appropriately sized target in place whenever the current tranche is near to completion (this should happen by the time projects are materially under construction—not just when they reach commercial operation). If developers are not in an absolute race to complete first and know that there is at least a fallback position albeit with a lower rate, they will be able to attract cheaper capital and correspondingly live with a ma-terially lower power price.

The fact that the first instal-lation target was so significantly oversubscribed implies that there is scope for a material reduction in the FIT rate for a further FIT. The extent of the possible reduction will in part depend on the size of the target itself (larger bringing more economies of scale).

The objective of a lower power price is self-fulfilling with higher installation targets, as suppliers will be encouraged to set up local operations and consider local sourc-ing initially for items such as towers and ultimately higher value-added components, which will also provide Philippine jobs and growth—one of the key objectives of the architects of the Renewable energy law.

Allowing the projects in excess of the initial FIT round, which have already been built (of approximately 200 megawatts) to receive a FIT at a price which is near the expectations of the developers (near the original

FIT rate), is the correct course of action. nevertheless, this should not be done at the expense of adopt-ing further installation targets at rates that will ensure the successful development of wind energy for the nation. A “target” that merely ad-dresses what has already been built is not what was envisaged by the regulator, namely an actual target that the industry can aim to com-plete in future construction.

If the DOe adopts a significant increase in the installation target beyond FiT2 to at least 750 MW, or preferably 1,000 MW in aggregate, the risks to developers inherent in the first come, first served allocation system can be mitigated, contribut-ing to a material and progressive reduction in the cost per kWh and, hence, a reduced FIT rate. Projects can be delivered at a discount to the current FIT rate if this action is taken and there is every reason to believe that grid parity can be achieved within a three to five year time frame, which was the original objective of the FIT system.

Joona Selin is the executive direc-tor of the Nordic Business Council of the Philippines. For comments and inquiries, contact joona.selin@nbcp.com.ph.

FIT rates for wind projects

Free FireTeddy Locsin Jr.

ThAT Grace Poe is natural born is only half of the issue that should never have been raised against her: her legal qualification to be president. A natural mother, so poor she

abandoned her infant, could not have flown from new York to give birth in, of all places on the planet, Iloilo. now rich Filipinos do the opposite and wear corsets to fly and give birth over there.

If she lost it, she got it back

All of Grace’s official records show that she’s been here most of her life. To be sure, Philippine of-ficial records are not definitive of anything, among a race riddled with forgers who are citizens of a coun-try where records are mishandled, faked and destroyed. her records even show that she was Filipino when she left to fulfill the desperate

wish of all honest Filipinos. every Filipino who is not a suc-cessful thief in public life has wanted to change his or her country, either by trying to improve it from within or getting out, preferably going to America. Grace did that. She went where we all want to be unless the stealing is really good back here. She even managed

to become a US citizen. This did not change the material fact of her natural birth. no law can change a fact, certainly not a mere court or commission. A law can be changed by another law, but not a fact—un-less it favors the accused. The Senate electoral Tribunal ruling is a kind of law, and it does not deny a basic right but rather affirms it. So no case for abuse of senatorial discretion can lie against its decision. Grace’s adoptive parents stayed on, her father having made himself famous enough, and loved enough, ran for president in a campaign that swiftly soured when the national Archives faked a document that he was American. That prompted Grace to return to campaign by her father’s side. When her father died of loss and heartbreak, it also prompted her to renounce her American citizenship, run and win the first place in the Sen-ate, and adhere only to the Filipino

citizenship that, by a law I helped sponsor, she never lost. Yet, here we are again, with an-other bunch of bull shitters deny-ing a Filipino the benefit of the basic principle of political participation in the most important sense: Grace’s basic right to run for president even if she clearly has the 10 years resi-dence required to be sworn into the presidency. And if animus revertendi or the in-tention to return remains doctrine, she arguably never interrupted her residence here. And if she conceivably lost it, she got it back for the purpose of assum-ing the office she is, by all surveys, certain to win. By the time she takes her oath of office as president, she will have re-sided here in the strictest legal sense all of the 10 years that it took previ-ous natural-born resident Filipinos to case the joint—and rob it when they were elected president.

By Noah Smith | Bloomberg View

The big long-term problem with Japan’s economy is demographics. A declining population means that, even if productivity and per-capita GDP rise at a decent clip,

total growth will be low or even negative. That makes Japan’s mountain of debt—the highest as a percent of GDP among rich nations—hard to service. Meanwhile, an aging population means fewer workers to support each retiree. 

Immigration is tough for Japan

Many solutions have been float-ed for this demographic problem. Work-life balance, it is hoped, will boost fertility, as women are no longer forced to choose between careers and raising children. Corpo-rate governance reform should give productivity a boost. And robots, many believe, will substitute for hu-man workers. But once in a while, someone asks me: Why doesn’t Ja-pan try mass immigration? 

For the US, Canada or Australia, mass immigration would be the natural solution to a labor short-age. In fact, immigration is the only reason that the US has managed to keep its population growing about 0.5 percent to 1 percent a year in re-cent decades, even though the coun-try’s fertility rate is only enough to keep population constant. So isn’t immigration a no-brainer for gray-ing, shrinking Japan? 

It isn’t so simple. First, Japan’s

population is  projected  to shrink by about 500,000 a year during the next few decades. Canceling out that loss with immigration would mean importing almost 0.5 percent of Ja-pan’s population a year. Countering population aging would mean even more dramatic inflows. This would require Japan to be about as open to immigration as the US. 

That would be extremely difficult for a country that has traditionally been closed to immigration. Japan, unlike the US, has no birthright citizenship law. People who get vi-sas to work in Japan pass on their foreign citizenship to their children, unless those children go through the long process of naturalization. That tends to create a class of per-manent outsiders, who suffer all sorts of institutional and informal discrimination. 

This has happened at least twice before. Koreans who immigrated to

Japan during their country’s period of colonial rule ended up passing their Korean citizenship to their descendants. These people, called “zainichi,” speak only Japanese and grow up with Japanese culture, but have Korean passports. Although many are highly entrepreneurial, they often endure discrimination and are the occasional targets of ugly racist movements. Only recently, due to high intermarriage rates, is this minority being assimilated into Japan’s society. 

A second example was the wave of Brazilian guest workers, called “dekasegi,” who moved to Japan in the 1980s and 1990s. These Brazil-ians were ethnically Japanese, but culturally distinct and didn’t suc-ceed at assimilating into Japanese society. In the late 2000s, with Ja-pan’s economy on the rocks, many of these guest workers were asked to leave. 

Japan’s closure to immigrants isn’t a result of racism—at least, not as people in the West conceive of the term. If so, then Japanese Brazilians or Koreans (who are ethnically indistinguishable from native Japanese) would have had little trouble assimilating. Instead, the groups were denied equal access to the economic totem pole. 

Discrimination in Japan is

based on nationality. Guest work-ers are not considered true im-migrants, and their children and grandchildren are often seen as outsiders because of the absence of birthright citizenship. employers tend to treat them as foreigners. Japanese individuals are gener-ally very welcoming to foreign-ers—many of my close friends are Japanese—but corporations are a different story. 

Without birthright citizenship, Japan can’t engineer an immigra-tion boom to offset its population loss. With conservative politicians in perennial control of Japan’s gov-ernment, there is little chance that

the country will make big changes to its policies anytime soon. Xe-nophobia, though not as common among the populace as many be-lieve, seems to be rife at the higher levels of power. 

So should we forget about the possibility that immigration will help Japan out of its funk? Perhaps not. Although mass immigration is probably off the table for now, high-skilled immigration is a different matter. With the country’s talent pool shrinking, the government is eager to attract these kinds of work-ers. Last year a law  was approved to grant skilled workers perma-nent residency after three years of

employment in Japan (down from 10 years). That follows the imple-mentation  of a points-based im-migration system in 2012, which favors skilled and educated workers. 

These permanent residents will be different from the mass-immi-grant groups of earlier eras. Since they are entering as individuals instead of as groups, they probably will be in a better position to form Japanese friendships and marry Japanese spouses. They will most likely be highly proficient in Japa-nese, making the naturalization process easier. 

Importantly, many of these im-migrants will not be ethnically Asian. Their presence as natural-ized Japanese citizens, with high positions in Japanese companies, will slowly acclimate the populace to the idea of true immigrants. Let’s hope that will eventually translate into less discriminatory hiring practices at Japanese companies, and more public support for pro-immigration policies. 

In other words, though Japan probably isn’t ready for mass im-migration, its new policy of high-skilled immigration may slowly change the country’s institutional discrimination against foreigners. Perhaps in a few decades, Japan will be ready to open itself more.

Driving MomentumJoona Selin

The objective of a lower power price is self-fulfilling with higher installation targets, as suppliers will be encouraged to set up local operations and consider local sourcing initially for items such as towers and ultimately higher value-added compo-nents, which will also provide Philippine jobs and growth.

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phWednesday, December 9, 2015

Peso poised for strong2015 finish–ING Bank

China Ends Japan dominanCE of asia’s high-TECh ExporTs

17 percent quarter-on-quarter. While the island-nation may not be one of the top targets yet, Kaspersky Lab Southeast Asia Channel Sales Director Jimmy Fong said the results indicate that there is no doubt that cybercriminals are now noticing the country. “It shows that cyberattacks against the Philippines are accelerating at full speed,” he said. Globally, the report highlighted the rise in mobile threats, the attempted theft of money from online bank ac-counts and targeted cyberattacks. Kaspersky Lab solutions detected and repelled an aggregate of 235.4 million malicious attacks from online resource in the third quarter, or 38 per-cent lower than in the second quarter. A total of 323,374 new malicious mobile programs was identified dur-ing the period ending September 30, a 10.8-percent increase from the second quarter and a 3.1-percent hike since

the first quarter this year. Over 1.5 mil-lion malicious packages were installed on mobiles during the third quarter, 1.5 times higher than in the previous quarter. Almost 626,000 trials to launch mal-ware capable of stealing money via access to users’ online banking were blocked, or 17.2 percent lower than in the second quarter, although it is a 5.7-percent hike since the third quarter 2014. Also during the quarter on review, there were 5.68 million notifications about attempted malware infections to steal money from users through online access to bank accounts. I t is repor ted that by end- September, the Kaspersky Lab Glob-al Research and Analysis Team re-searched a number of sophisticated cyberespionage campaigns. These included investigating the Turla group, which uses satellite communications to manage its com-mand-and-control servers’ traffic for

subsequent operations; the Darkho-tel, or Advanced Persistent Threat (APT), that infiltrates hotel Wi-Fi net-works to place backdoors on target computers; and the Blue Termite APT focusing on stealing information from organizations in Japan. Kaspersky Lab also had a joint probe with the Dutch National High Tech Crime Unit and Panda Security, resulting in the arrest of two suspects believed to be involved in the CoinVault ransomware attacks. “The developments in the third quarter demonstrate that the global threat landscape is continuing to evolve at a fast pace. Malicious mobile programs are on the rise and in coun-tries where online banking is popular, people are at considerable risk from Trojans looking to target them,” said David Emm, principal senior security researcher at Kaspersky Lab’s Global Research and Analysis Team.

By Bianca Cuaresma 

The local currency is still expected to end the year strong amid the anticipated

US FederalReserve liftoff at its meet-ing at the end of the year, a local bank economist said.

CHINA has brought to an end Japan’s dominance of Asia’s high-technology expor ts,

according to the Asian Development Bank (ADB). China’s share of Asia’s exports of high-tech goods, such as medical in-struments, aircraft and telecommuni-cations equipment, rose to 43.7 per-cent in 2014, from 9.4 percent in 2000, the ADB said. Japan’s share slid to 7.7 percent last year, from 25.5 percent in 2000. Southeast Asian nations includ-ing Malaysia and the Philippines also lost market share. The shift marks China’s success in boosting innovation and technology as key drivers of its economy as it seeks to move up the manufacturing value chain. Low-tech goods accounted for 28 percent of China’s exports in 2014, com-pared with 41 percent in 2000, accord-ing to ADB’s Asian Economic Integration Report 2015 released on Tuesday. “China has made inroads in taking more and more hi-tech manufacturing onshore even as a lot of critical com-ponents are still imported from other countries,” said Frederic Neumann, co- head of Asian economic research at HSBC Holdings Plc. in Hong Kong. “It’s becoming highly competitive, with highly skilled labor and we’re seeing increasing research and development moving into China.” China-made dronesCHINA-MADE drones, smartphones, and even high-speed trains have be-come internationally competitive,

and the number of enterprises in the high-tech manufacturing sector has tripled to almost 30,000, from less than 10,000 in 2000, Shang-Jin Wei, ADB chief economist, said in an e-mail. “We are seeing some signs of success in some industries,” he said. “But China is still not a global technology leader like the United States or Germany. What we are seeing is that China is catching up very fast on the ’standard technology’ products and is beginning to do some innovations of its own.” China also leads in exports of low-tech goods, such as textiles, food and beverages, wood, pulp and paper products. It had a 55.4-percent market share in 2014, followed by India with 9.4 percent. Cross-border production networks —trade in parts and components and final assembly—have strengthened re-gional interdependence, as seen from increasing intraregional trade shares, the ADB said. Asia’s intraregional gross exports have increased about 3.6 times from 2000 to 2011, it said.

Economic zonesSPECIAL economic zones can be a driving force for increased trade, investment and economic reform in Asia at a time when the region is experiencing a slowdown in trade, provided the right business environments and policies are put in place, the ADB said. In developing Asia, countries with economic zones attract significantly more foreign direct invest-ment (FDI), corresponding to 82 percent greater FDI levels, it said. Bloomberg News

THEY BETTER WATCH OUT Filipino traffic enforcer Ramiro Hinojas dressed as Santa Claus directs traffic in a dancing way along a busy intersection in suburban Pasay City on Tuesday. Hinojas said his dance moves were influenced by Michael Jackson and hopes that people will be entertained as they wait during the Christmas gridlock. AP Photo/AAron FAvilA

Cyberattacks. . . Continued from A1

  This, according to ING Bank Ma-nila economist Joey Cuyegkeng, is due to the fact that the surge in re-mittances in the holiday season will allow the peso to move stronger in the last trading weeks of the year. In particular, Cuyegkeng said in his latest market views that he sees the peso to end the year at around 46.80 to a dollar. On Tuesday the local currency

was broadly unchanged from the previous day’s trade value at 47.12 to a dollar, with a total trading value of $453.6 million in the day. The peso closed on Monday at 47.13 to a dollar, with total traded volume at $398.1 million. Despite the optimism, the econo-mist warned that there are a lot of threats to this forecast—particularly if the US dollar gains strong traction

to strengthen toward year-end. Cuyegkeng further said that if the peso breaches the 47.2 to a dollar re-sistance mark before the year ends, it can slide further down to 47.5 to a dollar, depending on the strength of the US economy. “Peso at around 47.2 seems to be a strong barrier, which has been recently tested repeatedly. Main-taining this resistance level would depend on the interest-rate guidance of the FOMC [Federal Open Market Committee], which comes out with its quarterly updates of forecasts of inflation, GDP and interest rates,” the economist said. A strong buffer, according to the economist, is the inflows from overseas Filipino workers—which are anticipated to surge toward the month of December, as families ramp up expenditures during the holiday season. Latest data from the central bank

showed that remittances in the coun-try hit $18.41 billion in the first three quarters of the year. This is a growth rate of 4.1 percent compared to the same nine-month period in 2014. The positive growth rate is also a recovery from the 0.6-percent con-traction in August, prompting worries that the contribution of remittances to the economy is slowing down. This, as earlier mentioned by central bank officials, is said to rise significantly higher as, historically, remittance inflows increase in the fourth quarter of the year. In 2014 remittances were the highest in the last three months of the year—with the peak in Decem-ber at $2.18 billion. The FOMC will be having its last policy meeting for the year on December 15 and 16, while the Bangko Sentral ng Pilipinas has calendared its last meeting for the year on December 17. 

Budget. . . Continued from A1

The Programmed New Appropria-tions of P2.071 trillion, together with the P930.7 billion in Automatic Appro-priations, which is outside the purview of the propsoed 2016 GAA, will pro-vide for the appropriation cover for the P3.002-trillion budget, according to him. Ungab said the proposed budget has been shaped by financial-management

reforms that include the two-tier budgeting approach, the GAA as released document policy, the performance-informed budget-ing, the unified-accounts code structure and the bottom-up budgeting process. He said the budget measure is an-chored on the assumptions that economic growth will be 7 percent to 8 percent this year, in 2016 and over the medium

term; inflation will be within 2 percent to 4 percent, and an exchange rate of 43 to 46 per dollar. It is also consistent with other macroeconomic assumptions, such as a 364-day T-bill rate of 2 percent to 4 percent, exports growth at 6 percent and imports growth at 12 percent. “The distribution of the 2016 national budget by sector reflects the government’s commitment to inclusive growth, as more than P64 in every P100 will be spent on social and economic services in 2016—

this shows a dramatic improvement from P45 in every P100 in 2015,” Ungab said. The Social Services sector continues to get the largest share of the budget at 36.8 percent, or P1.106 trillion. Economic Services will get the second-largest share of the budget with 27.6 percent, or P829.6 billion, while General Public Services will receive 17.3 percent, or P517.9 billion. The Debt Burden, which is composed of Interest Payments to service outstanding debts, as well as Net Lending to govern-ment corporations, will reach an all-time low of 14 percent of the total budget, or P419.3 billion. To boost the government’s capacity to defend national sovereignty, the Defense sector will get a share of 4.3 percent, or P129.1 billion. Senate President Franklin M. Drilon said the bicam is expected to sign its committee report in the morning and have it submit-ted in the afternoon for ratification. Drilon said the main features of the budget include the P57 billion allotted for the first phase of the 2015 Salary Stan-dardization law (2015 SSL) in 2016. ”The second [main feature] is that the Department of Education will receive the highest budget amounting to P412 billion, or 22-percent increase from this year’s P321 billion,” he said. Drilon added that the in-crease will be used for the construction of 47,500 classrooms and the continued imple-mentation of the K to 12 Program. Once ratified, the copy of the Con-gress-approved national budget will be forwarded to Malacañang for signature of President Aquino, according to Drilon. ”Perhaps the President will have one week to review it and have it signed into law before Christmas,” Drilon told the media. Drilon said the Senate is also eyeing approval of the 2015 SSL, an implementing law for the four-year salary increase of the public servants, within the week. With PNA