June 2014, when receipts grew 21.3 percent.  Esguerra said the coun-try’s export earnings last November placed the Philippines as the “highest export performer” among East and Southeast Asian economies for the third time this year. The Philippines outperformed Vietnam, whose export earnings growth hit 10.8 percent last Novem-ber; the People’s Republic of China, 4.7 percent; Taiwan, 3.7 percent; and Hong Kong, 2.8 percent. 

See “Export,” A8 See “Toyota, Ford,” A8

PESO ExchangE ratES n US 45.0640 n jaPan 0.3766 n UK 67.9926 n hK 5.8110 n chIna 7.2514 n SIngaPOrE 33.7305 n aUStralIa 36.6225 n EU 53.1485 n SaUDI arabIa 12.0059 Source: BSP (09 January 2015)

www.businessmirror.com.ph n Tuesday, November 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 6 sections 28 pages | 7 days a weekn saturday, January 10, 2015 Vol. 10 No. 93

A broader look at today’s businessBusinessMirrorthrEE-tImE

rOtary clUb Of manIla jOUrnalISm awarDEE2006, 2010, 2012U.n. mEDIa awarD 2008

Slower 2015 export growth seenUncErtaIntIES cOntInUE tO hOUnD majOr marKEtS fOr lOcally maDE gOODS

The attack on the newsweekly came as far-right parties have been gaining in popularity not only in France but also in Germany, Brit-ain, Greece and elsewhere, feeding the anti-immigrant sentiments on which they thrive.

With tension building, Muslim community leaders advised veiled women to avoid going out alone and urged their members to join in a national minute of silence for the victims of Wednesday’s attack on the offices of Charlie Hebdo in Paris.

“Anyone who associates this criminal act with Islam is mistaken. It is an act of terrorism. The perpe-trators of this act should be arrested, condemned and eradicated,” Abdal-lah Zekri, president of the National Observatory Against Islamophobia, told reporters at the Grand Mosque of Paris. While expressing sympathy for the victims, he noted that it is often Muslims who suffer after such

attacks. “Whenever something like this happens, we are on the front lines as scapegoats,” he said. “There have been a number of attacks al-ready this year.”

The incidents outside mosques in Le Mans, southwest of Paris, and in Villefranche-sur-Saone, near Lyon—neither of which caused injury—sug-gested that anti-Muslim retribution had already begun, he said.

Although President François Hol-lande called for national unity, lead-ers of the far-right National Front demanded that he step up measures to tackle Islamic fundamentalism and bring back the death penalty.

“The time for denial and hypocri-sy is no longer possible,” party leader Marine Le Pen said in a video on her party’s web site.

“The absolute rejection of Islamic fundamentalism must be proclaimed loudly and clearly.”

The National Front and other

anti-immigrant groups have gained ground in Europe, propelled by a moribund economy, high unem-ployment rates and frustration with mainstream parties.

Recent surveys show Le Pen would outpoll Hollande and center-right challengers if the 2017 election were held now. Her party led all French parties in the European Parliament elections, picked up two seats in the French Senate and took power in 11 French towns.

Other parties benefiting from seething resentments include Brit-ain’s Independence Party, which has called for tougher controls on im-migration, and Germany’s Patriotic Europeans Against Islamization of the West, or Pegida, which rallied an estimated 18,000 marchers on Monday in Dresden.

Analysts said such parties would probably use the attack in France to mobilize more support.

“This has already started,” said Johannes Kiess, a sociologist at the University of Leipzig, pointing to recent posts on the German party’s Facebook page.

“Today in France the Islamists that Pegida has warned you about for 12 weeks have shown that they are not capable of democracy and see violence and death as a solution!” read one post on Wednesday.

Los Angeles Times/TNS

The WorldBusinessMirror news@businessmirror.com.phSaturday, January 10, 2015B3-4

Backlash against Muslims feared across EuropePARIS—Gun and grenade attacks

outside at least two French mosques heightened fear on

Thursday of an anti-Muslim backlash after a military-style assault on a newspaper that satirizes Islam.

WASHINGTON—The US is looking at ways to in-crease its aid to the Iraqi

security forces, including help with ways to counter roadside bombs and buildings rigged to explode, Army Gen. Martin Dempsey, the top mili-tary officer, said on Thursday.

But he said it’s still unclear when the Iraqi troops will be ready to mount an offensive against Islamic State (IS) militants that have con-trol of portions of northern and western Iraq.

Speaking to reporters in his of-fice, Dempsey said the US will help with “some kind of broad counterof-fensive” when Iraq is able to conduct the military assault and any needed reconstruction afterward.

Dempsey, chairman of the Joint Chiefs of Staff, spoke after meeting with Israeli military chief Lt. Gen. Benny Gantz, for more than an hour.

“We’re working with Iraq’s mili-tary and civilian leaders to deter-mine the pace at which we will en-courage them and enable them to do

a counteroffensive,” Dempsey said.“So when the government of

Iraq finds itself ready not only to conduct the military operations necessary to recapture their ter-ritory, but also to follow it with the humanitarian and reconstruc-tion efforts, then they will, with us, initiate some kind of broad counteroffensive.” In the mean-time, he said, the coalition has kept up “a drumbeat, a steady, building pressure” on IS insurgents.

The US has kept up a persistent

bombing campaign against militant targets in Iraq and Syria, launching air strikes on seven locations in Iraq on Wednesday.

Asked about Iran’s military opera-tions in Iraq, which have included air strikes, Dempsey said Iraqi leaders have kept the US informed about Iranian activities against IS.

So far, he said, those operations haven’t threatened US troops or their mission. But, if that changes, he said the US will adjust its military campaign plan. AP

US eyes new ways to aid Iraq forces

IslamIc state group militants stand with a captured Iraqi army Humvee at a checkpoint outside Beiji refinery, some 250 kilometers north of Baghdad, Iraq, last June 19. AP

BEIJING—The son of actor Jackie Chan pleaded guilty in a Beijing court on Friday to

providing a venue for drug users and was sentenced to six months in prison, following a major crackdown on illegal drugs in the Chinese capital.

Jaycee Chan, 32, also was ordered to pay 2,000 yuan, or about $320, the Dongcheng District People’s Court in Beijing said on its microblog account.

Police detained Chan, Taiwanese movie star Ko Kai and several others in August in Chan’s Beijing apartment. Chan and Ko tested positive for mari-juana, and police seized more than 100 grams (3.5 ounces) of marijuana from Chan’s home, the official Xin-hua News Agency said. “I violated the law. I deserve to be punished. When I return to society, I won’t do it again,” Chan said in courtroom footage aired on state broadcaster China Central Television (CCTV). Police arrested more than 7,800 people last summer in Beijing over illegal drug use, police said in August. Other celebrities, in-cluding actor Gao Hu, were also among those detained in what was described as the biggest such crackdown in two decades. Illegal drug use has ballooned in China in recent decades, after being virtually eradicated following the 1949 communist revolution.

Xinhua said the maximum sen-tence for the charge against Chan was three years in prison. The trial and sentence were especially sensitive for Jackie Chan, who was named an anti-drug ambassador in 2009, and sits on China’s top national political advisory panel—the Chinese People’s Political Consultative Conference.

The actor has told Xinhua that he did not use his connections to inter-fere with the case and that he hopes his singer-actor son will eventually become an anti-drug ambassador.

CCTV had aired video of the police raid on Jaycee Chan’s apartment, in which Chan was shown identifying marijuana in his possession. Ko tes-tified on camera that he had used drugs at Chan’s home. CCTV also said Chan told police that he has been us-ing drugs for eight years. Ko, whose real name is Ko Chen-tung, has been released after a 14-day administrative detention for drug use. AP

Jackie Chan’s son sentenced to 6 months for drug offense

Hong Kong actor Jaycee chan poses during a premiere of his film Break Up Club in Hong Kong in this June 14, 2010, photo. AP/Vincent Yu

UNITED NATIONS—The Unit-ed Nations secretary-general is making a personal appeal to

the Boko Haram and Islamic State (IS) extremist groups to “immediately and unconditionally” free the hundreds of children they have abducted.

Ban Ki-moon spoke out on Thurs-day during informal remarks to the UN General Assembly and again to report-ers afterward. He said he was making the appeal “as a father and grandfa-ther” in addition to his global role.

Boko Haram horrified the world last April when it kidnapped 276 schoolgirls, of whom more than 200 remain missing. The group has ab-ducted hundreds of other boys, girls and young men and women.

The IS group also has been accused of kidnapping children, especially girls, in its sweep across parts of Syria and Iraq. AP

UN chief appeals to extremist groups: Free the children

SEOUL, South Korea—South Korean officials said on Friday they were considering whether

to deport a Korean-American woman accused of praising rival North Korea during a recent lecture.

Prosecutors on Thursday asked the Korea Immigration Service to deport California-resident Shin Eun-mi after determining her com-ments violated South Korea’s anti-Pyongyang security law, according to immigration officials who spoke on condition of anonymity citing office rules.

The Korean Peninsula remains in a technical state of war, split along the world’s most heavily fortified border since the 1950-1953 Korean War, which ended with an armistice, not a peace treaty.

In South Korea, praising North Korea can be punished by up to seven years in prison under its anti-Pyongyang security law.

Critics have called for the security law to be scrapped, saying it infringes upon freedom of speech. Supporters argue that the law is needed because of constant threats from North Ko-rea. Past authoritarian leaders in South Korea frequently used the law to suppress political rivals.

Shin regularly posted stories about her trips to North Korea on OhmyNews, a popular South Korean online news site. During a November lecture in Seoul, she said that many North Korean defectors living in South Korea had told her they want to go back home and that North Ko-reans hope new leader Kim Jong Un will bring change.

She also praised the taste of North Korean beer and the cleanliness of North Korea’s rivers.

Shin has said she had no intention of praising the country and was only expressing what she felt during her travels in North Korea. AP

Peru’s Fujimori convicted of corruption in fifth trial

LIMA, Peru—A three-judge panel in Peru convicted jailed former President Alberto Fuji-

mori on Thursday of funneling more than $40 million in public funds to tabloid newspapers that smeared his opponents during his 2000 re-election campaign.

The conviction was the fifth for the 76-year-old Fujimori.

The judges sentenced him to eight years in prison and fined him $1 million. The sentence will run concurrently with the stiffest he has received to date: 25 years for murder in the military death-squad killings of 25 people. He has two additional convictions for corruption and one for abuse of power.

During sentencing, Fujimori wrote on sheets of blank paper on a courtroom desk that the money he was convicted of diverting was used to build airstrips and medical posts in towns “infiltrated by the Shining Path” rebel movement.

After the sentence had been read,

he rose to his feet and said: “I don’t agree with the sentence, in no way. I am going to appeal.”

The tabloids, for which witnesses in a previous trial said Fujimori per-sonally dictated headlines, were sold in Peru’s poorest neighborhoods, where they would be displayed out-side kiosks.

Typically, the tabloids would carry headlines alternately calling Fuji-mori opponents crazy, communists and homosexuals.

Fujimori initially was hailed for defeating runaway inflation and the Shining Path rebels during his decade in power, but he became in-creasingly autocratic and stained by corruption.

He fled from Peru in 2000 amid a bribery scandal and was extradited in 2007 from Chile, where he was ar-rested trying to return to his home-land to attempt a political comeback.

He is Peru’s most expensive pris-oner, costing the state $157,000 a year, authorities say. AP

Peru’s former President alberto Fujimori, photographed through a glass window, attends the final sentencing of his embezzlement trial, at a police base on the outskirts of lima, Peru, on January 8. Fujimori, who is already serving 25 years following previous convictions, is being tried for allegedly diverting government funds to finance newspapers that backed his successful run for a third term. AP/MArtin MejiA

Seoul may deport American over positive N. Korea comments

world b3-4

PAPAL VISIT 2015

5 DAYS

INSIDE

bacKlaSh agaInSt mUSlImS fEarED acrOSS EUrOPE

Toyota, Ford post higher sales in 2014

blacK nazarEnE DEvOtEES tOlD: tUrn tO gOD, bE SPIrItUal anD hUmblEMANilA Archbishop

luis Antonio Cardi-nal Tagle told devo-

tees who trooped to the Quirino Grandstand on Thursday night for the pahalik sa Poong Nazareno to be spiritual and humble. “i challenge you to turn to Jesus and bow down to Him. Strive to live a spiritual life,” Tagle said in the vernacular. in his message, Tagle also told the devotees of the Black Nazarene to be compassionate. “Those who will turn to Je-sus will gain eternal life. True devotees are those who will bow down to Jesus because they know that, without Jesus, they are nothing,” he said. The traditional pahalik sa Poong Nazareno started at 1 p.m. and lasted until 11:30 p.m. on Thursday. On Friday the traslacion, or the annual procession of the im-age of the Black Nazarene back to its home in Quiapo Church, started at 8:07 a.m.

A 34-year-old devotee died, while hundreds of others were injured, as a sea of humanity joined the procession for the revered Black Nazarene on Fri-day that marked its feast. Police and Red Cross of-ficials expect the number of injured or treated to further increase, as devotees flocked to the carriage of the centuries-old black statue of Jesus Christ. Chief insp. lerma Tirana, spokesman of the National Capital Region Police Office (NCRPO), identified the fatality as Renato Gurion, who was from Dimasalang, Manila. Gurion suf-fered a heart attack before he fell from the carriage bearing the image of the Black Nazarene. She said Gurion, who was a member of the hijos for the Black Nazarene or “protectors” of the religious image during procession, was later pinned down by the carriage, which was being pulled by hundreds

‘TraslaCIÓN’ The black Nazarene, a life-size statue of Jesus bearing the cross en route to His crucifixion on Calvary, is surrounded by devotees as it goes through the annual traslación, or the procession through the streets of Manila, starting from the Quirino Grandstand to the Minor basilica of the black Nazarene, also known as the Quiapo Church. The procession attracts millions of devotees from all over the country, who, walking barefoot as a sign of humility, jostle each other for a chance to touch it. More photos on A2. See story below. ALYSA SALEN

By Cai U. Ordinario

The National economic and Development Authority (Neda) said on Friday that lingering

uncertainties facing the country’s major markets could temper export earnings in 2015. TOyOTA Motor Philippines

Corp. (TMPC) and Ford Phil-ippines recorded higher sales

last year due to sustained demand for vehicles in the country. TMPC reached a milestone when vehicle sales in 2014 grew by 41 per-cent to 106,000 units, from 75,161 units posted in 2013. This marks the first time that sales of the Japanese carmaker breached 100,000 units in a single year. The company, however, could not yet provide details on which vehicle segments drove sales last year. Toy-ota was able to register record sales monthly, breaking the 8,000-unit mark for the first time in March and selling more than 10,000 units in July and October. Toyota launched four models last year—the All-New Altis, innova, yaris and the Wigo. TMPC sells a total of 18 models in the Philippines. Meanwhile, Ford Philippines also enjoyed higher sales last year. The company sold 20,341 units in 2014, 53 percent higher than the 13,286 units sold in 2013.

Neda Deputy Director General Emmanuel F. Esguerra said de-mand for locally produced goods in major economies could slacken early this year. “Slack demand by the start of 2015 may soften the demand for Philippine exports, in addition to the uncertain-ties still lingering in many big econo-mies,” Esguerra said in a statement. “Considering that exports of goods comprise around 40.7 per-cent of the country’s GDP [gross domestic product], vulnerability to external shocks through the trade channel can pose downward risk to growth,” he added. Neda issued the pronouncement after the Philippine Statistics Au-thority (PSA) released the November exports data, which showed that ex-port earnings rose 19.7 percent year on year to $5.17 billion. Export earnings growth in November was the highest since

esGUerra: “slack demand by the start

of 2015 may soften the demand for

Philippine exports, in addition to the uncertainties still lingering in many

big economies.”

Continued on A2

HSBC. . . Continued from A8

BusinessMirror news@businessmirror.com.ph Saturday, January 10, 2015A2

News

Continued from A8

scenes from the ‘traslaciÓn’

roy domingononie reyes

kevin de la cruz

roy domingo alysa salen

n restaurantsFalling gas prices have been a boon for restaurants. Restaurant sales rose 4.4 percent from June, when gas prices peaked, to novem-ber, according to government data. This suggests that hiring is poised to pick up because jobs at restau-rants have risen just 1.3 percent over the same period. Brian Miller of the recruiting firm Patrice and associates said inquiries from restaurants seeking new managers have jumped. He at-tributes the increase to lower gas prices, which have boosted sales and “increased the sense of urgency” among many chains. “Their demand is up, their foot traffic is up, they want to expand,” Miller said. “We have companies calling us, saying, ‘We need help now.’” T h is week , t he fa st - food chain Sonic—with more than 3,500 drive-ins—reported that sa les have been boosted by cheaper gasoline. “There’s no doubt in the last six months the price of fuel has been a big contributor,” said Cliff Hudson, Sonic’s CEO.

n housingaT 3.73 percent, this week’s aver-age 30-year mortgage rate is down drastically from its 4.51-percent level a year ago. That gap trans-lates into nearly $75 less a month in payments on a roughly average $165,000 mortgage—a savings of almost $900 a year. Mortgage rates have sunk as yields on 10-year Treasuries have dropped in sync with ultra-low in-flation, a response to the oil-price decline. lower mortgage rates make homes more affordable and should help spur gains for the 2.3-million-job residential construction industry. “Falling oil prices will prob-ably help local economies and home prices in markets that lack oil-related industries” around the Midwest and northeast, Jed Kolko, chief economist at the real-estate firm Trulia, said in an analysis. The national association of Realtors forecast this week that sales of existing homes would total 5.3 million this year, a 7.3-percent increase from 2014. Housing failed to contribute much to overall economic growth last year, but Michelle Meyer, a se-nior economist at Bank of america, said she is “cautiously more op-timistic” for 2015 because of the lower mortgage rates and likeli-hood of higher incomes.

n energyTHiS industry is the primary loser from falling fuel costs. Oil and gas drilling has been a source of j ob growth for five years, though it still constitutes a small percentage of the total. Bob Baur, chief global economist for Principal global in-vestors, calculates that drilling has accounted for an average of 3,600 added jobs a month since 2010, out of a total average of 191,000 added each month. Payroll processor aDP said this week that the mining industry, which includes oil and gas drilling, shed about 2,000 jobs last month after gaining an average of 3,000 a month in 2014. in the past, Baur notes, falling oil prices have helped fuel healthy expansions for the overall US job market and economy. Plummeting oil costs in 1986 and 1998 led to ro-bust consumer spending. Some companies that spend a lot on oil and gas will likely enjoy a boost in profits. That could “translate into faster wage growth than we’ve seen,” Baur said. AP

how lower oil prices could fuel more hiring in u.s.

to be much lower than expected, this should pose a drag on gDP growth well into 2015,” the global bank said.  HSBC also said that while investments remain robust in 2014, its pace will likely slow down in the succeeding quarters due to administrative problems as indicated in the country’s handling of the ostensibly growth-boosting Public-Private Partnership

(PPP) Programs.  “investment is one bright spot for the economy, which has exceeded the trend rate in recent years. But we believe its pace will likely decelerate in the coming quarters. Thus far, the PPP initiative has been lackluster, with the president hav-ing to rebid one of the projects awarded,” HSBC said.

  another risk relates to so-called policy pa-ralysis hounding the country’s policy planners as they craft programs given their outlook on the upcoming 2016 elections.  While HSBC’s forecast inflation for 2015 and 2016 are within the government target for the period at 3.8 percent and 3.7 percent respec-tively, above-target inflation remain one of the more critical risks over the policy horizon.

  “The Philippines continues to face short-term supply shocks. For example, the govern-ment already projected an electricity shortage for 2015. The decline of oil prices has helped offset price risks from various supply-side con-straints. However, should the Philippine peso weaken sharply and oil rise again, inflation could bounce back sharply,” HSBC warned.

Bianca Cuaresma

of thousands of devotees. “He was declared dead on arrival at the Manila Doctors Hospital,” Tirana said. Meanwhile, the Philippine na-tional Red Cross reported that its medical personnel, who were spread in areas around the Quirino

grandstand and even along the route leading to the Quiapo Church, treat-ed at least 359 people by 12 noon for hypertension.gwendolyn Pang, Red Cross secretary-general, said at least 230 people were also treated for minor wounds. Philippine national Police Spokes-man Chief Supt. Wilben Mayor esti-

mated that around 1 million people joined the procession as of 11 a.m. The Feast of the Black nazarene poses one of the country’s biggest an-nual security challenges as the faith-ful of asia’s most Catholic country flock to the capital. last year, church officials estimated that more than 10 percent of the population joined

the festivities, where the statue of a black Jesus is paraded from Quirino grandstand to Quiapo Church in downtown Manila. about 3,500 policemen will be deployed on Friday to control the crowd, interior Secretary Manuel Roxas ii said in an e-mailed state-ment on Thursday. about 2,000

traffic cops were asked to wear diapers because they will need to spend long hours in the street and may not have easy access to public toilets given the size of the crowd, the Metropolitan Manila Develop-ment authority said in a statement on Thursday. Claudeth Mocon-Ciriaco, Rene Acosta, Bloomberg News

Black nazarene devotees told: turn to god, be spiritual and humbleContinued from A1

SUNRISE SUNSET

6:24 AM 5:43 PM

MOONRISEMOONSET

9:37 AM 9:52 PM

TODAY’S WEATHERMETROMANILA

LAOAG

BAGUIO

SBMA/CLARK

TAGAYTAY

LEGAZPI

PUERTOPRINCESA

ILOILO/BACOLOD

TUGUEGARAO

METROCEBU

CAGAYANDE ORO

METRODAVAO

ZAMBOANGA

TACLOBAN

3-DAYEXTENDEDFORECAST

3-DAYEXTENDEDFORECAST

CELEBES SEA

LEGAZPI CITY23 – 28°C

TACLOBAN CITY23 – 28°C

CAGAYAN DE ORO CITY

METRO DAVAO23 – 30°C

ZAMBOANGA CITY24 – 31°C

PHILI

PPIN

E ARE

A OF R

ESPO

NSIB

ILITY

(PAR

)

SABAH

PUERTO PRINCESA CITY 23 – 30°C METRO CEBU

25 – 29°C

ILOILO/BACOLOD

24 – 29°C

23 – 29°C

24 – 30°C 24 – 31°C 24 – 31°C

23 – 29°C 23 – 29°C 23 – 28°C

23 – 30°C 24 – 30°C 24 – 31°C

24 – 31°C 24 – 31°C 23 – 31°C

24 – 32°C 24 – 32°C 24 – 32°C

Watch PANAHON.TV everyday at 5:00 AM on PTV (Channel 4).

Weekday hourly updates: 6:00 AM on Balitaan, 7:00 AM & 8:00 AM on Good Morning Boss!, 9:00 AM, 10:00 AM, 11:00 AM, 12:00 PM, 1:00 PM

on News@1, 3:00 PM, 4:30 PM, and 6:00 PM on News@6

www.panahon.tv

@PanahonTV

JANUARY 10, 2015 | SATURDAY

HIGH TIDEMANILA

SOUTH HARBOR

LOW TIDE

8:09 AM-0.03 METER

TUGUEGARAO CITY 18 – 27°C

LAOAG CITY 21 – 30°C

TAGAYTAY CITY 18 – 27°C

SBMA/CLARK 21 – 29°C

20 – 31°C 20 – 32°C 20 – 31°C

19 – 30°C 19 – 29°C 19 – 28°C

20 – 30°C 20 – 31°C 19 – 31°C

13 – 23°C 12 – 22°C 13 – 22°C

19 – 28°C 19 – 28°C 19 – 28°C

24 – 29°C23 – 29°C 23 – 30°C

23 – 31°C 23 – 30°C

22 – 31°C22 – 30°C 22 – 31°C

24 – 30°C24 – 30°C 24 – 31°C

Partly cloudy to cloudy skies withisolated rain showers and/or thunderstorms

Cloudy skies with rain showersand/or thunderstorms.

FULL MOON

12:53 PMJAN 05

BAGUIO CITY12 – 21°C

24 – 31°C

12:25 AM0.92 METER

JAN 11SUNDAY

JAN 12MONDAY

JAN 13TUESDAY

JAN 11SUNDAY

JAN 12MONDAY

JAN 13TUESDAY

Partly cloudy to at times cloudywith rainshowers

NORTHEAST MONSOON AFFECTING LUZON.(AS OF JANUARY 9, 5:00 PM)

METRO MANILA21 – 30°C

Northeast Monsoon locally known as “Amihan”. It a�ects the eastern portions of the country. It is cold and dry; characterized by widespread cloudiness

with rain showers.

HALF MOON

5:46 PMJAN 13

Light rains

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Saturday, January 10, 2015 A3BusinessMirrorThe Nation

By Recto Mercene 

ALEGISLATOR representing overseas workers on Friday denounced what he called

the brazen display of power by Manila International Airport Authority (Miaa) General Manager Jose Angel Honrado in ordering all international  airlines and concerned stakeholders to implement the integration of the airport terminal fee in all tickets purchased starting February 1.

By Butch Fernandez

PRESIDENT Aquino said on Friday he will formalize, after the papal visit next week, the appointment of his

former House colleague, Department of Health (DOH) Officer in Charge Janette Garin, as health secretary in place of Sec-retary on-leave Enrique Ona, who was earlier implicated in a vaccine-procure-ment anomaly. “I am very satisfied with Secretary Ga-rin,” Mr. Aquino told reporters in a brief interview, as he unveiled multimillion-pe-so government infrastructure projects in Romblon on Friday. The President indicated that he would also be “putting in another undersecretary to help her [Ga-rin]” run the DOH. “Of course, this [Garin’s Cabinet nomination]

is subject to confirmation by the Commission on Appointments,” he said. But the President clarified that Garin may have to

wait for her formal appointment papers to be processed after the visit of Pope Francis from January 15 to 19 next week.

“Siguro we will deal with a lot of the min-isterial stuff after the pope’s visit,” Aquino said, adding, “Parang iyong urgent matters will be attended to now, but those that can wait a little, ano, so as not to disrupt the people who are working on the pope’s visit.”

The President confirmed he also intends to talk separately with Ona and Garin after

the papal events to clarify pending issues involving health department transactions.

“Of  course, I’ll talk to him [Ona]. But I am still awaiting the completion of all of the investigations that he has done para naman may point ang pagu-usap namin, may conclusion,” Mr. Aquino added.

Legislator assails Miaa chief over terminal fee Party-list Rep. Roy Señeres of OFW Family Club and lead convenor of the NOP550 coalition composed of legis-lators, the recruitment sector, non-governmental organizations and mi-grant groups, said Honrado is courting a contempt order with his insistence to implement the airport terminal fee on migrant workers despite the clear provisions of the Migrant Workers Act, or Republic Act 8042, as amended by RA 10022 or the Amended Migrant Workers Act , he said, which strictly prohibits the imposition of travel tax and airport terminal fee on all Filipino migrant workers and other parties ex-empted by law. Despite an order from the Re-gional Trial Court (RTC) in Pasay City stopping the terminal fee implemen-tation and the pending motions filed

by the Solicitor General that have yet to be resolved by the court, Honrado issued the latest order to implement the P550 integration of terminal fee at the Ninoy Aquino International Airport (Naia) into airline tickets effective February 1. Judge Tingaraan Guiling of the RTC in Pasay ruled that the International Passenger Service Charge (IPSC) inte-gration in airline tickets is unenforce-able because of lack of publication. The memorandum integrating the IPSC in airline tickets honors all exemptions that the law has given to overseas workers, Muslim pilgrims endorsed by the National Commis-sion on Muslim Filipinos, athletes endorsed by the Philippine Sports Commission and others authorized by the Office of the President.

Exemption at the point of sale shall be subject to the presentation of an exemption certificate duly issued by the Philippine Overseas Employ-ment Administration or the Miaa. Meanwhile, Jackson Gan, indus-try leader and vice president of Fed-eration of Manpower Exporters Inc., urged the Civil Aeronautics Board (CAB) to intervene in the massive cancellation of over 400 flights, both international and domestic on January 15, 17 and 19 owing to the no-fly zone at Manila’s premier airport on the occasion of the visit of Pope Francis. “The CAB should order the air-lines that will be affected to use the Clark International Airport as the alternative airport for the canceled departures and arrivals previously

scheduled by international and do-mestic airlines,” Gan said. “Thousands of Filipino workers who have booked their return flights to their job sites on those days and thousands more who are expected by their employers will be severely affected by the canceled flights.” The airport congestion at the Naia has reached its maximum limits and it is time to divert new airline routes and existing ones to Clark in Pam-panga, the agency said.  “The Miaa has already admitted that they have to reject new airlines that want to use the Naia and this is one reason why tourist arrivals have dipped in 2014, aside from the massive delays experienced by airline passengers in departing or arriving at the four Naia terminals.”

Aquino set to appoint Garin as DOH chief after pope’s visit

ALEGISLATOR on Friday called on the police and military to double security arrangements for Pope

Francis’s five-day visit next week because of threats during previous papal visits. Nationalist People’s Coalition Rep. Sherwin “Win” Gatchalian of Valenzu-ela City was referring to the knife attack against Pope Paul VI during his 1970 visit to the Philippines and the attempted as-sassination of Pope John Paul II by sus-pected international terrorists during the 1995 World Youth Day Celebrations in Manila. “The papal visits in 1970 and 1995 showed that the Philippines is not that safe as far as popes are concerned, since those who want to inflict harm on the leader of the Roman Catholic Church can go around any security measure if they are

determined to do so,” Gatchalian said. In 1970 a Filipino armed with a knife tried to attack Pope Paul VI but was prevented by Msgr. Paul Casimir Mar-cinkus, who was able to parry the attack.The  powerfully built American priest, who forced the assailant to the ground, later became a papal bodyguard. On January 6, 1995, Philippine se-curity forces uncovered the plot to as-sassinate Pope John Paul II after they raided the Josefa Apartments in Manila, where international terrorist Ramszi Ahmed Yousef rented a room. He was later arrested and convicted for the 1993 bombing of the World Trade Center in New York and the 1994 bombing of a Philippine Airlines flight to Japan. The plot to kill Pope John Paul II would have been carried out on January 15,

1995, by a suicide bomber dressed up as a priest while the pope’s motorcade passed on his way to the San Carlos Seminary in Makati City. The assassin planned to get close to the pope, and detonate the bomb, according to evidence gathered from Yousef’s seized laptop computer. Gatchalian lauded President Aquino for being hands-on in the security arrange-ments for the five-day papal visit and for being honest enough to tell reporters of his dissatisfaction with the security plan. “That the President himself is not sat-isfied with the security arrangements is an indication that the National Police and the Armed Forces should double up and fine-tune their security plans for Pope Francis from the time he arrives up to the time he leaves,” Gatchalian said.

Recto Mercene

Tighter security during pope’s visit sought

garin

By Cai U. Ordinario

The country’s manufacturing output slowed to 8.1 percent in November 2014, according

to data released by the Philippine Statistics Authority (PSA) on Friday.

Manufacturing output posted 8.1% growth in November ’14

In the preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI), the PSA said the country’s Volume of Pro-duction Index (VoPI) slowed from the 18.8-percent growth posted in November 2013.

National Economic and Develop-ment Authority (Neda) Deputy Di-rector General and currently Officer in Charge Emmanuel F. Esguerra said that, to improve the performance of the sector, there is a need to develop further through the implementation

of the Manufacturing Resurgence Program, as well as faster imple-mentation of infrastructure projects, including those under public-private partnerships. 

“Upgrading our national quality infrastructure to be at par with in-ternational standards will not only improve the quality of our products, but also open up more markets for our country’s exports,” Esguerra said.

“Of equal importance is the gov-ernment’s expenditure program, which needs to regain traction in

order to restore a vital policy lever to stabilize the economy should ex-ternal risks materialize,” he added. 

However, the year-on-year growth rate posted by the VoPI in November was the highest since June, when the year-on-year growth of the VoPI was at 12.7 percent. 

The PSA said six of 13 major sectors posted positive incre-ments in production output. Print-ing posted the largest increase of 237.1 percent. 

Other sectors that posted double- digit increases were fabricated metal products at 64.7 percent; beverages, 46.6 percent; nonmetallic mineral products, 15.8 percent; paper and paper products, 15 percent; and basic metals, 14.8 percent.

“Aside from a robust export demand, the manufacturing sec-tor’s higher growth for the period is attributed to increased domestic de-mand, as well as improvement in the deliveries of goods,” Esguerra said. 

“With strong local consumption

bolstered by the inflow of overseas Filipino workers’ remittances, as well as higher income resulting from the holiday season, the sector is expect-ed to display a higher growth in the fourth quarter of 2014,” he added.   

PSA data showed that, in terms of value, the year-on-year growth of the Value of Production In-dex (VaPI) reached 7.5 percent in November 2014. 

This was also slower compared to the 13.1 percent year-on-year growth posted in November 2013. However, it was the highest since June when the VaPI posted a 10.1-percent year-on-year growth rate. 

Meanwhile, the manufacturing industry’s average capacity utiliza-tion in October 2014 for total manu-facturing stood at 83.6 percent.  

The PSA said more than 50 per-cent, or 11 of the 20 major industries, operated at 80 percent and above capacity utilization rates.

The five manufacturing sectors that posted the highest average

capacity utilization rates are basic metals at 88.4 percent; petroleum products, 88.4 percent; nonmetal-lic mineral products,  86.5 percent; electrical machinery, 84.7 percent; and machinery (except electrical), 84.7 percent.

“The proportion of establish-ments that operated at full capacity [90 percent to 100 percent] was 24.8 percent in November 2014. About 56.2 percent of the establishments operated at 70 percent to 89 percent capacity, while 19 percent of the es-tablishments operated below 70 per-cent capacity,” the PSA said. 

The MISSI is a survey of manu-facturing establishments. Selection of samples for this survey is done purposively, so as to include only the large establishments, or the so-called industry leaders.

The survey is conducted monthly nationwide, using a shuttle question-naire that provides the respondents with a running account of the previ-ous months’ data for one year.

Devotion anD enterprise an enterprising vendor, clad in a traditional Black nazarene t-shirt, positions his food cart before a long queue of devotees during the traditional pahalik to the Black nazarene at the Quirino Grandstand in Luneta on thursday. vendors and entrepreneurs cash in on the yearly feast, where no less than a million are expected to attend. KEVIN DE LA CRUZ

PRESIDENT Aquino on Friday stood firm on the fare adjust-ment in the Metro Rail Transit

(MRT) Line 3 and Light Rail Transit (LRT) Lines 1 and 2 systems, saying the decision may not be popular, but it is right.

“Pero ulitin ko ano iyong desisyon hindi naman popularidad,” the Presi-dent said in media interview, follow-ing his attendance to the inspection and inauguration of infrastructure projects in Bohol.

This, even as militant, labor and commuter groups have filed petitions before the Supreme Court seeking to stop the implementation of the MRT and LRT fare increases.

Mr. Aquino said the fare hikes are aimed at reducing the P12 bil-

lion in annual subsidies just for train operations by P2 billion. The subsidies are sourced from taxes collected all over the country.

“Assume natin na all the 14 mil-lion daytime residents of Manila, ’yung the NCR [National Capital Region] Metro Manila [denizens], ginagamit ’yang MRT at LRT, and that’s a very big assumption. So there are 14 million people being benefited and 86 million helping pay the bill,” he said.

President Aquino added that the fare increase, along with the Senate- approved subsidy, will be used for the improvement of services of the MRT and LRT systems.

“May kailangang magbayad. So talaga namang makatwiran naman

’yung ‘ ikaw ang nakikinabang baka naman pwedeng dagdagan mo ang bayad mo.’ Sa increase hindi pa rin mapupuno ’yung P60 [subsidy] ng MRT, may subsidy pa ring kailan-gan,” he said.

Mr. Aquino further defended the adjustment, noting that the light rail systems provide better services than the air-conditioned buses that are currently charging higher fares.

“So, ang tanong: ’Yung bus ba mas maayos sa traffic kaysa ’yung MRT at LRT?’ Siyempre mas maganda ’yung serbisyo ng MRT kaysa doon sa air-conditioned bus. So nagbabayad ka ng mas mahal doon sa bus pero mas maganda ang serbisyo supposed to be nitong MRT mas tuluy-tuloy,” he said. PNA

Aquino stands firm on MRT, LRT fare increases

By Allen Sam V. EstabilloPhilippines News Agency

GENERAL SANTOS CITY—Energy firm Supreme Power Corp. is investing around

P1 billion for the construction and development this year of an 11.9-megawatt (MW) bunker-fired power plant in nearby Koronadal City in South Cotabato.

Executives of Supreme Power and its partner, Next Power Consortium Inc., led on Thursday the formal groundbreaking of the power plant that is planned to go on stream later this year, in partnership with the South Cotabato Electric Cooperative 1 (Socoteco 1).

Lawyer Juanita Sy, Supreme Power president, said they are tar-geting to complete the construction and start the operations of the plant, which will rise in a property owned by the electric cooperative in Matulas, Barangay Paraiso in Koronadal City within the next six months.

“We already completed the neces-sary requirements set by the Depart-ment of Energy for the construction of the plant,” she said.

Based on the company’s agree-ment with Socoteco 1, the power plant, which will be powered by modular generator sets from South Korea, will be embedded into the systems of the electric cooperative.

Socoteco 1, which lists a daily peak power demand of 36 MW, serves Koronadal City, eight mu-nicipalities in South Cotabato and Lutayan town in Sultan Kudarat.

Santiago Tudio, Socoteco 1 gen-eral manager, said the company will operate the plant for 15 years and will directly serve the needs of its service or franchise area. After 15 years, he said Supreme Power will transfer the ownership of the plant to the cooperative at no cost.

Lawyer Vince Tecson, Next Power president and CEO, said the opera-tions of the plant will bring about additional charges of 80 centavos per kilowatt-hour (kWh) to consumers of Socoteco 1.

But, he said, such rate will be sub-ject to public consultations and the approval of the Energy Regulatory Commission (ERC).

“We already applied for the issu-ance of a provisional authority for the rates pending the release of the ERC’s final approval,” he said.

Tecson said their applied rate of 80 centavos per kWh is justified based on the projected costs for the opera-tions of the plant.

“We are not allowed by law to charge more than what is allowed. We are also assuming that the rate we are proposing is acceptable to the ERC,” he said.

Tecson said they decided to start the construction of the plant ahead of the issuance of the ERC’s approval for their applied rates to show their sincerity in pursuing the project.

As a new entrant in the power in-dustry, he said they deemed it vital to build the power plant first and prove that they are capable of running or operating a major project.

Rep. Ferdinand Hernandez of the Second District of South Cota-bato, who graced the groundbreaking rites, lauded Socoteco 1 for pursuing the project. “Socoteco 1 acted ahead and did not wait for another power crisis to happen. We should com-mend them for that,” he said.

With the entry of the project, Her-nandez said they expect the area’s power situation to further stabilize and eventually usher in more growth in terms of trade and investments.

“This is a major endeavor—about a billion worth. We need more peo-ple like you here in the province,” he added.

Energy firm pours P1B for S. Cotabato power-plant project

Sen. Aquilino “Koko” Pimentel III on Friday bewailed the sad state of do-mestic air travel and maritime services that saw thousands of holiday travel-ers stranded at airports and seaports, especially during Christmas holidays.

The Mindanao lawmaker said he would call for a Senate investigation into the state of the country’s domestic airline operations when Congress re-sumes this month to include an inquiry into roll on-roll off (Roro) services.

Pimentel cited, in particular, the chaotic operations of a local airline that caught the ire of local and foreign travelers, whose flights were delayed for hours or canceled on last minute.

He also expressed alarm on the overbooking of shipping and bus firms servicing the Manila-to-Visayas Roro routes, as thousands of passen-gers failed to reach their destinations on time.

Pimentel asked the Department of Transportation and Communications to impose stiff sanctions against erring companies to protect the interest of the riding public.

”It is about time that laws governing the operations of airlines and shipping and bus companies are reviewed and updated, so that they conform to inter-national standards,” Pimentel said.

He, specifically, questioned the practice of outsourcing the ground services of airline companies, which, he said, could unduly endanger the se-curity and safety of passengers.

He said the personnel handling the ground services of airline companies should be properly trained and strictly selected because they are handling highly sensitive flight operations. PNA

DAVAO CITY—The budget office of the Autonomous Region in Muslim Mindanao (ARMM) gave a rare occa-sion of training its budget officers in financial planning in a bid to arrive at an efficient utilization of the budget in a region that has been known for mas-sive fund losses.

The ARMM Regional Budget and Management Office (RBMO) conduct-ed the one-day workshop on work and financial-plan preparation for planning and budget officers of locally funded agencies in the region.

The training seeks to improve the skills of its key personnel on budget implementation through a detailed work plan, said Mylene Macusang, RBMO executive director.

“The workshop would not only [en-able] our finance personnel, but also to [improve] proper utilization of re-sources through efficient budget execution,” she added. This is impor-tant, she added, “[because] the work and financial plan is the blueprint, which will serve as gauge of their per-formance” Macusang said her office will closely monitor the compliance of every agency to the work and financial plan they submitted.

RBMO launched last year a comput-erized system called e-RBMO “to fast track transactions and better serve its clientele.” She said her office expects the program to be fully operational on the first quarter of this year.

“We are enhancing our system to safeguard our resources, this is part of our preparations for the transition [to the Bangsamoro],” she said.

Manuel T. Cayon

briefsSEnator SEEkS ProBE

into domEStiC maritimE, air- travEl ProBlEmS

armm-rBmo trainS BUdGEt oFFiCErS to CUrB FUnd lEak

Saturday, January 10, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

EconomyBusinessMirrorA4 news@businessmirror.com.ph

By Lenie Lectura

THE unit 1 of the Malaya ther-mal power plant is set to un-dergo another inspection next

week to determine the extent of the repair that needs to be done.

The unit was last inspected early this week by STX Marine Service Co. Ltd. of Korea. During the inspec-tion, one of the four couplings was removed. However, these couplings that connect the valve and the tur-

bine took 14 hours of electric healing and natural cooling for each prior to manual dismantling, according to Power Sector Assets and Liabilities Management (PSALM) President Emmanuel Ledesma Jr.

When asked for an update on Fri-day, Ledesma, in a text message, said that it will take another week before STX Marine can proceed with the disassembly of the turbine.

“This assessment, however, depends on the decoupling of two

remaining valves. The accomplish-ment of the work is still being evalu-ated at present and we could provide a better assessment after next week’s inspection,” Ledesma added.

Still, the state firm is hopeful that the 90-day work schedule to overhaul Malaya 1 would be met in time for the anticipated power shortage in summer of 2015.

Once Malaya1 is rehabilitated, the entire Malaya facility can run at its full capacity of 650 megawatts (MW).

“We are still looking at finishing the work on March 3, 2015, or 90 days after, per contract stipulation,” Ledesma said. Under the terms of ref-erence, STX Marine work must com-plete the work within 90 days from issuance of the notice to proceed.

The government wants the reha-bilitation of the Malaya Unit 1 done before summer to make it available in time for the Malampaya shutdown.

The Malampaya facility will go offline from March 15 to April 14 to

commence Phase 3 of the Malampaya project involving the installation of a platform aimed at maintaining the fuel supply to power plants providing half of Luzon’s power needs.

The Malaya power facility con-sists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler. It was rehabilitated in 1995 by the Korea Electric Power Corp. under a 15-year rehabilitate-oper-ate-manage-maintain agreement.

STX Marine also recently won a one-year contract to operate and maintain the two units of the Malaya thermal power plant.

STX is engaged in the design, con-struction, supervision and repair of system or equipment related to en-ergy. The company is also a provider of maritime solutions, and among its services are ship management, ma-rine transportation and brokerage ship design, construction, leasing and repair.

PSALM, Korean firm rush repair of Malaya 1 thermal power plant

ExpEct rollbacks amounting to more than p1 for every liter of petroleum products by Monday, says an indepen-dent gas company official.

”Yes, we can expect a rollback, more than p1 again,” Eastern petro-leum cEO and chairman Fernando Martinez told philippine News Agency (pNA) in a text message.

Martinez notes both gasoline and diesel will have a price reduction by next week. phoenix petroleum Vice president for External Affairs Raymond Zorrilla has also confirmed the oil price reduction by Monday.

”Yes we can expect another roll-back,” Zorrilla told pNA in a separate text message.

Based on the Department of En-ergy’s (DOE’s) latest oil price monitor-ing in Metro Manila, diesel was being sold at a common price of p29.25 per liter at gas stations, while gasoline was offered at a common price of p40.25 per liter. It was observed after the first rollback of 2015 on January 5.

DOE said diesel was being sold at a range of p27.05 to p30.40 per liter in the Metro Manila area.

For gasoline prices, the DOE moni-tor said it was playing between the amount of p36.05 to p42.20 per liter.

Also, the oil-price chart indicated that 2014’s total rollback for gasoline amounted to p13.29, while diesel was reduced by p15.03.

Meanwhile, the country’s total pe-troleum demand for the first half of 2014 reached 58,737 million barrels, which was equivalent to 339.3 million barrels of oil, according to DOE figures.

the first half of 2015 will likely top the previous half’s consumption demand due to the factor of low oil prices. Further, for the first half of 2014, the DOE said oil imports have reached 33,040 million barrels, mainly contributed by increased gasoline importations. PNA

SEN. Juan Edgardo “Sonny” Angara on Friday pushed for the immediate passage of a bill granting 20-percent student-fare discount on all kinds of public transportation utilities, includ-ing the Light Rail transit (LRt) lines 1 and 2 and the Metro Rail transit (MRt) Line 3 systems.

“the majority of Metro Manila stu-dents, who depend on the affordabili-ty of LRt and MRt, will definitely suffer from the recent fare hike,” Angara said.

”We should assist the parents and students in shouldering transportation expenses relative to the rising cost of education in our country,” he said.

presently, the grant of student fare discounts in jeepneys and buses is only through a memorandum circular of the Land transportation and Fran-chising Regulatory Board (LtFRB).

Angara has filed Senate Bill 203 seeking to put the thrust of the LtFRB circular forward by institutionalizing the grant of discount privilege to students on all land, water, air and rail transport utilities. If enacted, the 20-percent dis-count will apply to regular domestic fares in airplanes and ferries, while the LRt and MRt are mandated to desig-nate a student/senior citizen fare booth in their boarding stations.

Student fare discount will also be applicable not only during school days, but also on weekends and holidays.

Students who are refused to be given the fare-discount privilege may file their complaints with the LtFRB, the Maritime Industry Authority, the civil Aeronautics Board (cAB), or the Department of transportation and communications (DOtc) for the LRt and MRt.

Drivers, conductors or inspectors of land transport utilities and firms, es-tablishments or agencies of water, air and rail-transport utilities, who refuse to provide discounts, will be fined and penalized with suspension of license.

briefsOIL FIRMS LIKELY

TO ROLLBACK FUEL-PUMP PRICES BY P1 NEXT WEEK

ANgARA PUShES FOR 20% STUdENT-FARE dISCOUNT

Too many holidays bane to business–AmCham By Catherine N. Pillas

The numerous nonworking holidays in the Philippines has become a burden to the

American Chamber of Commerce in the Philippines (AmCham), prompting the group to conduct a study on the financial impact of these holidays, which they intend to submit to the government’s economic Cabinet cluster.

“One of the biggest constraints right now is the number of non-working holidays. The coming of the pope is exciting, of course, but the impact on American businesses

is tremendous in terms of overtime costs and scheduling,” AmCham Executive Director Ebb Hinchliffe said in a phone interview.

The government has declared,

through Executive Order (EO) 936,  January 15, 16 and 19 as non-working holidays in National Capital Region on top of the de-clared total 17 holidays, (nonwork-ing, regular and special) scheduled for 2015

Hinchliffe said the biggest im-pact, so far, has been on fast-mov-ing consumer goods firms and cites that members’ delivery and supply schedules have been disrupted with the sudden declaration of the non-working holidays in January on occasion of the pope’s visit.

“We are going to make some

By VG Cabuag

SAN Miguel Pure Foods Co. Inc. said it will buy several food companies in Southeast

Asia as part of the firm’s expansion that targets the region’s general population, and not just overseas Filipinos.

Francisco Alejo III, company president, said it will prioritize buy-ing firms in Indonesia and Vietnam, where it currently has its plants, but also looks at other possibilities in Thailand and Malaysia.

“You have to understand that one of the strengths of Pure Foods is processed meats. So we’re looking on how we are going to acquire or we’re doing a greenfield in those markets outside of the Philippines, which we

already did in Indonesia,” Alejo said. Alejo said the company is already

“talking to someone” both in Indo-nesia and Vietnam, while it hired an investment bank to identify possible companies for acquisition in Thai-land and Malaysia.

At the moment, its Vietnam plant produce feeds, hogs and processed meats and its plant in Indonesia, the world’s most populous Muslim nation, only has processed meats.

Part of Pure Foods’s regional push is to tap the local population, or sell the locally manufactured products domestically and not only to the pockets of Filipino communities in the Middle East and North America, including the US.

“We have lots of exports because Pure Foods is popular to Filipinos

overseas,” Alejo said, adding that the companies that they are acquir-ing should have large domestic mar-ket share.

Pure Foods is selling P15 billion of Perpetual Series 2 preferred shares.

In its filing before the Securities and Exchange Commission, it has applied to sell a base offer of P10 bil-lion and an over-allotment option of P5 billion in preferred shares.

It intends to sell a total of 15 million in preferred shares at 1,000 apiece. BPI Capital Corp., China Banking Corp., RCBC Capital Corp., SB Capital Investment Corp. and Standard Chartered Bank have been chosen as joint-issue managers and book runners.

The amount of proceeds was lower than the P25 billion that was earlier

approved by the company’s board of directors.

According to its initial timetable, Pure Foods will start its offer on February 16, 2015 through March 5, 2015.

Unlike the common shares, the preferred shares will be biased on dividends, but it will be nonvoting, nonparticipating on any other future dividends other than what is speci-fied and nonconvertible to any other preferred shares or common shares of the company.

Pure Foods said it will use the proceeds to redeem some P15 bil-lion in outstanding preferred shares, which are callable starting March 3, 2014, or on any dividend payment date afterward.

The amount was issued in 2011

and was used to pay for the acquisi-tion of some of the Vietnamese brand and other food business acquisition in the country.

The shares will be divided into groups, the sub-series 2A preferred shares, whose rates will be based on the five-year secondary market rates of bonds and sub-series 2B, which will be based on the seven-year sec-ondary rate of bond.

The company said it may redeem the shares on the third anniversary of the listing date for the sub-series 2A and on the fifth year for the sub-series 2B.

Pure Foods reported a flat net income of P2.7 billion for the nine-month period ending September, or almost the same as the P2.69 billion it posted last year.

By Manuel T. Cayon Mindanao Bureau Chip

DAVAO CITY—The six hydro-electric power plants scat-tered across the Agus River

in the two Lanao provinces of central Mindanao belong to the national government, even as the areas are already likely to compose the new Bangsamoro political entity, the government socioeconomic planning body for Mindanao said.

Romeo Montenegro, chief of the international investments and public affairs division of the Mindanao De-velopment Authority (MinDA), said the issue on ownership, or exclusive management of the power plants, has been settled and clearly defined in the Framework Agreement on the Bangsamoro, the working document on establishing the new self-govern-ing unit for Filipino Muslims in Min-danao called the Bangsamoro.

“It was stated and clearly defined there that, because the Agus power plants are producing for the Mind-anao grid and not for Lanao del Sur, or areas that would compose the Bangsamoro, then the Bangsamoro would not have the sole and exclusive ownership and management control of the plants,” he said.

The production of the six Agus power plants, running from near the mouth of Lake Lanao in Marawi City, the capital of Lanao del Sur, with its Agus 1 plant and down to Agus 6 in Maria Cristina Falls in Baloi, Lanao del Norte, account for 53 percent of the electricity supply in the Min-danao grid. The only other main hydroelectric power plant contrib-uting to the water-sourced electric power is the Pulangui Power Plant 4, located along the Pulangui River in Maramag, Bukidnon.

The ownership of the plants kept popping up in the consultations un-dertaken in Mindanao, a concern that has become close to majority of Mindanao households due to the reg-ular episodes of long hours of power blackouts for the past several years.

Lanao del Sur is much closer to the discussion due to the complaints of its many rural residents that even many Lake Lanao barangays have not been energized despite hosting the power plants nearby. The basic law that would govern the general operation of the Bangsamoro is still awaiting Con-gressional enactment, and ownership and management of key resources, including mining and power, are im-portant provisions under wealth and political power-sharing.

Meanwhile, Montenegro dis-closed that the debt-ridden Lanao del Sur Electric Cooperative remained under serious discussion as to its operation and control.

BusinessMirror Saturday, January 10, 2015news@businessmirror.com.ph A5

Economy

Bountiful catch it was good day to go fishing for this fisherman gathering his catch by the beach in San Enrique, negros occidental, where most of the residents get their livelihood from the sea. NoNie Reyes

Agus power plants belong to natl govt, says MindA exec

hinchliffE: “one of the biggest constraint right now

is the number of non-work-ing holidays. the coming of the pope is exciting of course but the impact on

american businesses is tre-mendous in terms of over-

time costs and scheduling.”

proposals to the government of extending some kind of flexibil-ity to businesses, wherein the le-gal requirement to pay can be re-laxed on some of the nonworking holidays in a year, for example,” Hinchliffe said

The latest labor advisory issued by the Department of Labor and Employment reiterates that em-ployers must pay an additional 30 percent on top of an employees’ daily rate in the first 8 hours dur-ing a nonworking holiday. Higher rates apply if the employee goes on overtime.

Hinchliffe said the study is now being conducted and they expect to finish it by end of the first quar-ter. Afterward it will be presented to the economic Cabinet cluster.

 AmCham has long countered the number of holidays declared by the government, deeming them exces-sive in a previous position paper and recommending a review of the policy by the government.

PRESIDENT Aquino on Friday said the government is stepping up infrastruc-ture spending across the country to

P562.3 billion this year in a bid to significant-ly boost economic growth and job creation.

During his visit to Romblon province, Pres-ident Aquino said the country allotted P442.3 billion for various infrastructure projects last year, from just P175.4 billion in 2011.

“Panatag po ang loob nating magbuhos ng pondo para sa imprastruktura dahil alam nating bukal ito ng paglago ng ekonomiya. Kapag mas maayos ang kalsada, mas mabilis ang takbo ng mga produkto at serbisyo patungo sa merkado; mas lalago ang negosyo na siya namang lumilikha ng trabaho, at nagbubukal ng malawakang kaun-laran,” he said.

Mr. Aquino stressed that the government is considering the welfare of the majority of Filipinos in the implementation of infrastruc-ture projects.

“Estratehikong pagkilos ito ng gobyerno upang ihatid ang benepisyo sa mas nangangailangan, at mabigyan sila ng kakayahang makiambag sa kaunlaran. Mahalaga po dito ang maayos na ug-nayan ng lokal at pambansang gobyerno,” he said.

Mr. Aquino particularly cited the Rom-blon-Sawang-Agpanabat provincial road, the Sibuyan circumferential road, portions of San Jose circumferential road, road connecting Sta. Fe-Guinbirayan provincial road and the Romblon-Cogon-Sablayan road.

“Ang mga proyektong ating nabanggit ay bahagi lamang ng malawakan nating estratehiya na paunlarin ang sektor ng imprastraktura,” he added.

Further, President Aquino said his admin-istration’s good governance has resulted in sustained economic growth and 21 positive credit rating actions the Philippines received from different agencies around the world.

“Benepisyo nito: Tayo po’y nag-o-operate deficit pero nakakahiram na tayo nang mas mura dahil nga ho tumaas ang ating credit rat-ing at bumaba ang ating risko; mas naeengganyo ang mga negosyanteng magpasok ng puhunan sa bansa, na nanganganak ng trabaho sa maraming Pilipino,” he said.

“Sa walang patid na paglago naman ng ating gross domestic product, nabibigyan tayo ng kakayahang maghatid ng agarang benepisyo sa ating mga kababayan,” the President added. PNA

Aquino vows to step up infra spending this year

Pure Foods on the hunt for companies to acquire in Southeast Asia

Saturday, January 10, 2015

OpinionBusinessMirrorA6

Borrowing dollars: Good or bad?

editorial

ONCE again, two news stories touching on a similar subject sat nearly side by side. The first was about the Philippine government coming back to the global debt market, bor-

rowing a fresh $500 million in a dollar-bond sale. The second story was that loans taken out in foreign cur-rency from local banks were up 4.3 percent in the third quarter 2014 versus the previous quarter.

Prior to 1997, the average person in business never thought about bor-rowing funds in foreign currency, except when funding imports or the like. But it was foreign currency-denominated debt that caused the 2007 Asian crisis. While some commentators say it was a debt crisis, that is wrong.

The governments of Thailand, showing the infinite economic wisdom that most governments have, encouraged businesses to borrow in dollars from for-eign banks to expand their business, particularly in the property sector. The government, in return, “pegged” the Thai baht to the US dollar, so that there would not be a risk to the borrowers from currency exchange-rate changes.

Eventually, the government ran out of dollars to provide to the borrow-ers to pay back their loans, had to let the currency float and bankrupted the country.

Here is the key to the situation. Foreign debt to gross domestic product (GDP) of the four largest Association of Southeast Asian Nations countries went from 100 percent to 167 percent from 1993 to 1996. In 1997 it was over 180 percent.

The Philippine government and individuals and companies are borrow-ing in dollars anticipating a US interest-rate increase. The risk is in the peso exchange rate. But foreign just offered to buy over four times as much dol-lar debt as the Philippine government was offering. They do not see a great currency risk.

The reason is that the Philippines, both the government and private sector, has a low foreign-currency debt. Current foreign debt-to-GDP ratio is only 32 percent. By comparison, Australia is at 95 percent, and Sweden, South Korea and New Zealand, among others, are all higher than the Philippines.

Borrowing in dollars at this moment makes sense as long as done in a prudent amount as the government just did. The interest-rate differential between local and foreign banks and between peso- and dollar-denominated debt is large enough to warrant the risk of the currency exchange rate.

For both businesses and government, borrowing and debt is a financial tool. As with all tools, you need to know which one to use, and how to use it properly.

WITH the Philippine Stock Exchange Composite Index (PSEi) having reached its historic daily and weekly closing high once again, it is probably time to talk strategy.

Historic high; What to do now?

But always remember this: “There are no stock-market geniuses; only bull markets.” In other words, any-one can make money if the market is going up on a longer-term basis.

With PSEi at its high, the ques-tion comes down to BTATH (Buying The All-Time High) or BTD (Buying The Dip).

Prices on the stock market never go one direction, as there will al-ways come a time when sellers will come in, even briefly, to dominate trading. Alternatively, buyers will hold back at some point causing prices to fall in the face of normal selling pressure, which never stops. Market action is always dominated by either the sellers or the buyers. But, in fact, buyers control price movement about 90 percent of the time, even on a daily basis. If there are no buyers, prices go down because

sellers are always in the market.Buyers come in and prices go

higher, because there is always an unlimited supply of money to buy against a limited amount of stock for sale. Sellers controlled trading in 2013; buyers have controlled the PSE since December 2013.

Now what do we do?Understand that there is abso-

lutely no such thing as “bargain hunting” buying. Once again, buy-ers buy a stock for only one reason. They believe the price will be higher in the future. They do not buy be-cause of the current price; they buy because of what they think the fu-ture price will be.

If you find a pair of shoes at the department store that is priced cheaper than two weeks ago, it is a “bargain” because it is now less ex-pensive. A stock is not a “bargain”

because it is cheaper than before.In May 2013 San Miguel Corp.

shares were at P125. Two weeks later, they were “bargain priced” at P90. Two months later, the shares were even more of a “bargain” at P70. Four months after that, the ultimate bargain price was P55. Sellers dominated the price move-ment for 10 months, until there were effectively no more shares to sell. Then, in February 2014, small amounts of buying into even smaller amounts of selling pushed the price to P85 within two months.

On the other hand, in July 2011, Universal Robina Corp. (URC) was “too expensive” at P47, having come up from P33 three months before. Since then URC has been “expensive” every New Year’s Day at P53, P87, P118, and in 2015 at P197.

Therefore, BTD on San Miguel wiped out your hard-earned wealth. BTATH on URC made you a fortune.

But, “there are no stock market geniuses; only bull markets;” and we are in a bull market.

The other question is, do I put in a lump sum of investment money or stage my investment over time?

I am a sucker for “buy one, take one” promotions, or at least I used to be. I finally realized that I was usually buying two of what I did not need even one of in the first

place. Either, the price before was way too expensive, or this is just a marketing scheme to get the same amount of money and move more merchandise.

Staged buying in a bull market is nothing more than a broker’s mar-keting scheme. There is nothing wrong with investing every month with new money. That makes sense. But to take your P100,000 and put it in P10,000 at a time over months makes no sense.

Data studies show that the high-est return, even when markets go up and down, is better with lump sum investing by a factor of two to one. In a bull market, it is even better for the “lump-summers.”

“But what happens if I put all my money in now and the stock market goes down?” One word: sell.

Decide how much you want to in-vest. Find and follow the best-stock market trend analysis you can find. Enjoy seeing your wealth grow as the market goes higher, and get out and run for cover if the trend starts going down.

E-mail to mangun@gmail.com. My

website is www.mangunonmarkets.com, and Twitter me @mangunon-markets. PSE stock market information and technical analysis tools provided by COL Financial Group, Inc.

OUTSIDE THE BOXJohn Mangun

IT’S the rare scandal that links air rage, corruption and the fate of the world’s 14th biggest economy. The Heather Cho kerfuffle, dominating South Korean news media, offers all

this and, perhaps, more: a chance to right a political system that’s veered off course.

Korea needs to stay outraged over ‘nut-rage’

The news media pounced on the delicious tale of Cho’s freakout, on a December 5 New York-to-Seoul flight, over the manner in which she was served macadamia nuts. Cho fig-ured her status as daughter of Korean Air’s chairman, which entitles her to demand that Flight 86 return to the gate to toss off a crew member, who didn’t pay her sufficient homage. The 40-year-old has since been indicted for obstructing aviation safety. She’s also being investigated for colluding with transportation officials.

News commentators are now slamming the sense of privilege felt by families running Korea’s corpo-rate giants, or chaebol. Indeed, Cho’s tantrum demonstrated, in a nut-shell, how nepotism and clubby ties between government and industry

hold back the economy.But why did it take Cho’s nut-rage

to get reporters on the case? Some-thing similar happened last April with the sinking of the Sewol, in which more than 300 people (most of them school kids) died. The ferry was operated by chaebol Chonghaejin Marine Co., a fact that was harnessed to explore how cronyism and the revolving-door between regulators, bureaucrats and the private sector put lives at risk. This fit a disturbing pattern. When a spectacular incident makes global headlines, journalists feel compelled to investigate Korea’s chaebol problem. When the dust settles, they move on. Rather than respond only to periodic public out-rage, journalists should keep a steady watch on the issue.

Two years ago, Park Geun-hye rode a wave of discontent into South Korea’s presidential Blue House. Many blame the widening gap be-tween the rich and the poor on the dominance of the chaebol, with their unseemly penchant for tax evasion, sibling battles over assets and ex-treme concentration of national wealth. Just five companies generate roughly two-thirds of South Korea’s gross domestic product. This out-sized influence stifles small-and-medium-size companies. It kills any chance a startup might have to intro-duce game-changing products and create new jobs. Park’s plan to rein in the chaebol is off to a slow start, and media elites share in the blame.

The chaebol are major advertisers with deep pockets and, like Japan’s vast power industry or America’s military-industrial complex, they are adept at using their brawn to muzzle criticism. In his explosive 2010 book Think Samsung, that company’s former in-house counsel Kim Yong-chul detailed how family-owned conglomerates allegedly used bribes and intimidation to “lord over” the government and the media. Kim says that, when he first approached local news outlets with the story, he found no takers.

The absence of sustained public pressure for corporate change takes

the onus off the government. If the media uncovered cronyism without waiting for scandals, Park would be under greater pressure to make good on her campaign pledges. She’s been slow to prod the chaebol to unravel cross shareholdings and share out-sized profits with workers. That’s unfortunate, as Korea cascades toward its so-called third-generation problem—the resentment toward the grandchildren of the founders of Samsung, Hyundai, LG, Hanwha and so on.

The chaebol founders were revered as pioneers, who helped power the economy’s rise from the ashes of the Korean war. But the third generation now taking the reins view their jobs as a birthright. Heather Cho, for ex-ample, is among the children thought to be in the running to replace the 65 year-old Cho Yang Ho, who runs the Hanjin Group of companies that includes Korean Air. Given the eco-nomic concentration that rests in a handful of family companies, Ko-reans have a strong interest in who runs them next.

A juicy dustup like Cho’s nut-rage is a timely opportunity to explore how incestuous ties between Seoul and business dent competitiveness. But Korea could be far more vibrant and entrepreneurial if the media did this job day in and day out.

HOM

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BLOOMBERG VIEWWilliam Pesek

Saturday, January 10, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

Evangelii Gaudium

46th part

Concern for the vulnerable

JESUS, the evangelizer par excellence and the Gospel in person, identifies especially with the little ones (cf. Matthew 25:40). This reminds us Christians that we are called to care

for the vulnerable of the earth. But the current model, with its emphasis on success and self-reliance, does not appear to favor an investment in efforts to help the slow, the weak or the less talented to find opportunities in life.

It is essential to draw near to new forms of poverty and vulnerability, in which we are called to recognize the suffering Christ, even if this ap-pears to bring us no tangible and immediate benefits. I think of the homeless, the addicted, refugees, in-digenous peoples, the elderly who are increasingly isolated and abandoned, and many others. Migrants present a particular challenge for me, since I am the pastor of a Church without fron-tiers, a Church that considers herself mother to all. For this reason, I exhort all countries to a generous openness, which, rather than fearing the loss of local identity, will prove capable of creating new forms of cultural synthesis. How beautiful are those cities, which overcome paralyzing mistrust, integrate those who are dif-ferent and make this very integration a new factor of development! How at-tractive are those cities, which, even in their architectural design, are full of spaces, which connect, relate and favor the recognition of others!

I have always been distressed at the lot of those who are victims of various kinds of human trafficking. How I wish that all of us would hear

God’s cry: “Where is your brother?” (Genesis 4:9). Where is your brother or sister who is enslaved? Where is the brother and sister whom you are killing each day in clandestine warehouses, in rings of prostitu-tion, in children used for begging, in exploiting undocumented labor? Let us not look the other way. There is greater complicity than we think. The issue involves everyone! This in-famous network of crime is now well established in our cities, and many people have blood on their hands as a result of their comfortable and si-lent complicity.

Doubly poor are those women who endure situations of exclu-sion, mistreatment and violence, since they are frequently less able to defend their rights. Even so, we constantly witness among them im-pressive examples of daily heroism in defending and protecting their vulnerable families.

Among the vulnerable for whom the Church wishes to care with par-ticular love and concern are unborn children, the most defenseless and innocent among us. Nowadays ef-forts are made to deny them their

human dignity and to do with them whatever one pleases, taking their lives and passing laws preventing anyone from standing in the way of this. Frequently, as a way of ridicul-ing the Church’s effort to defend their lives, attempts are made to present her position as ideological, obscurantist and conservative. Yet, this defense of unborn life is closely linked to the defense of each and every other human right. It involves the conviction that a human being is always sacred and inviolable, in any situation and at every stage of de-velopment. Human beings are ends in themselves and never a means of resolving other problems. Once this conviction disappears, so do solid and lasting foundations for the defense of human rights, which would always be subject to the passing whims of the powers that be. Reason alone is sufficient to recognize the inviolable value of each single human life, but if we also look at the issue from the standpoint of faith, “every violation of the personal dignity of the human being cries out in vengeance to God and is an offense against the creator of the individual.”

Precisely, because this involves the internal consistency of our message about the value of the hu-man person, the Church cannot be expected to change her position on this question. I want to be complete-ly honest in this regard. This is not something subject to alleged reforms or “modernizations.” It is not “pro-gressive” to try to resolve problems by eliminating a human life. On the other hand, it is also true that we have done little to adequately accompany women in very difficult situations, where abortion appears as a quick solution to their profound anguish, especially when the life developing within them is the result of rape or a situation of extreme poverty. Who can remain unmoved before such painful situations?

There are other weak and de-fenseless beings who are frequently at the mercy of economic interests or indiscriminate exploitation. I am speaking of creation as a whole. We human beings are not only the beneficiaries but also the stewards of other creatures. Thanks to our bodies, God has joined us so closely to the world around us that we can feel the desertification of the soil al-most as a physical ailment, and the extinction of a species as a painful disfigurement. Let us not leave in our wake a swath of destruction and death, which will affect our own lives, and those of future generations. Here I would make my own the touching and prophetic lament voiced some years ago by the bishops of the Phil-ippines: “An incredible variety of in-sects lived in the forest and were busy with all kinds of tasks…. Birds flew through the air, their bright plumes and varying calls adding color and song to the green of the forests…. God intended this land for us, his special creatures, but not so that we might destroy it and turn it into a wasteland…. After a single night’s rain, look at the chocolate brown rivers in your locality and remember that they are carrying the life blood of the land into the sea…. How can fish swim in sewers like the Pasig and so many more rivers, which we have polluted? Who has turned the won-derworld of the seas into underwater cemeteries bereft of color and life?”

Small, yet strong, in the love of God, like Saint Francis of Assisi, all of us, as Christians, are called to watch over and protect the fragile world in which we live, and all its peoples.

To be continued

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A DECADE or so ago, in his book Terror and Liberalism, the social critic Paul Berman derided the West for repeatedly making the conceptual error of refusing to understand “that, from

time to time, mass political movements do get drunk on the idea of slaughter.” Our mistake, he wrote, is “expecting the world to act in sensible ways”—that is, “without mystery, self-contradiction, murk, or madness.”

Don’t give the ‘Charlie Hebdo’ attackers what they want

But terrorism isn’t madness. That’s the true lesson that the West keeps refusing to learn. The terrorist isn’t irrational. Evil, yes; irrational, no. So, although most of the world surely agrees with President Barack Obama’s condemnation of the fatal shooting at the offices of Charlie Hebdo as “senseless attacks against innocent civilians,” it’s useful to remember that to the terror-ist, the attacks aren’t senseless, and the civilians aren’t innocent.

JihadTHERE is a logic to terrorism, a coldly calculated ends-means rationality. The armamentum of terror is chosen by radi-cal groups not because they are madmen but because they consider it efficacious. In short words, they believe it will get them what they want.

Many news organizations, in re-porting on the Paris attacks, have made the decision not to show the cartoons that evidently motivated the attackers. This choice is sensibly prudent—who wants to wind up on a hit list?—but from the point of view of the terrorist, it furnishes evidence for the rational-ity of the action itself. Killing can be a useful weapon if it gets the killer more of what he wants.

Terror seeks to raise the price of the policy to which terrorists object. In that sense, it’s like a tax on a particular activ-ity. In general, more taxes mean less of the activity. If you don’t want people to smoke, you make smoking more expen-sive. If you don’t want people to mock the Prophet Muhammad, you kill them for it. The logic is ugly and evil, but it’s still logic.

To the terrorist, history is full of useful lessons: The US withdrawal from Lebanon after the 1983 Marine bombing is a prominent example still discussed in terror circles. True, the counterlessons are often ignored, but perhaps that is because of their rarity. The September 11 attacks brought the war in Afghani-stan down on the heads of al-Qaeda and its Taliban protectors, but wars on ter-ror in that traditional sense—boots on the ground, bleeding and dying to hold territory—are difficult to mobilize and impossible sustain.

Thus, even after the fall of the Tal-iban, the terror lords counseled their warriors to patience. The West, they said, will grow weary. The West always grows weary. That, too, is a lesson drawn ratio-nally from history. And, as the terrorist well knows, there will always be people in the West who will counsel yielding, often by dressing up the terror as an unfortu-nate response to a “legitimate” concern.

The US nowadays fights terror largely electronically, through its surveillance, its drying up of the flow of funds and, of course, its drone wars. All of these, the patient and rational terrorist learns to evade. The occasional spectacular killing of a major terror figure might be viewed by theorists (myself included) as poten-tially reducing the demand side of the terror market, but the terror continues,

and even expands. The US-led coalition that is relying on airpower to attack Is-lamic State does not seriously imagine that its missiles and bombs will be able to roll back their territorial gains. For that, ground troops will be needed. Very soon, the Iraqi security forces are supposed to move on Mosul, but they will be trying to drive out a well-armed, well-funded and well-entrenched enemy.

Boko Haram has learned some of the same lessons, which is why the group is doing a good deal more than kidnapping girls to be forced into marriage and boys to be forced to fight. It is taking and holding territory. On the very day that the world was focusing on the attacks in Paris, Boko Haram was renewing its as-sault on Baga, in northeastern Nigeria, leaving the streets littered with corpses. Over the course of the past week, the death toll from the raids is estimated in the thousands.

All of which leads the second part of Obama’s condemnation, that the terror-ists are killing “innocent civilians.” Few, I hope, would disagree. The entire Western understanding of the law of war is built upon the immunity of noncombatants. From this point of view, intentionally targeting civilians is a war crime pre-cisely because civilians are innocent.

The terrorist disagrees. Terrorists, notes the philosopher Jeff McMahan, “are unlikely to think of themselves as killing innocent people.” McMahan points to the writings of Osama bin Laden, who did not take the position that Americans could be killed because God said so. Rather, McMahan says, bin Laden believed “that it is permissible to kill Americans because of what they have done.”

A generation ago, radicals raised to the writings of Frantz Fanon took a similar line. I’m old enough to remember campus coffeehouse conversations in the 1970s, when armchair revolution-aries argued with every appearance of seriousness that the child of the coloniz-ers, living among the colonized, is not merely a legitimate military target, but actually morally blameworthy for living off the sweat of the native brow. Again, that this logic might be reprehensible doesn’t mean it isn’t logic.

This is a point we tend to forget. When we condemn terror as a sort of madness, we refuse to look with a clear eye at the way the enemy is thinking. The enemy is not making the same mistake. He studies us, working out our weaknesses and our fears. As the anthropologist Talal Asad notes in his work on suicide bombers, the terrorist’s point is less to shock us by what he has done but to leave us fright-ened about what act of indiscriminate violence might come next.

The terrorist knows what scares us. He believes he also knows what will break us. Our short-run task is to prove rather than assert him wrong. In the long run, however, the only true means of de-terrence is the creation of a new history, in which the terrorist is always tracked to his lair, and never gets what he wants.

SERVANT LEADERRev. Fr. Antonio Cecilio T. Pascual

DATAbASECecilio T. Arillo

Why electricity rates keep on rising

TO answer this question, let us first take a look at the country’s energy situation for 12 years (1973–1985), a specific period covered by President Marcos’s total energy plan for

the country made successful by the right mix of regulated and deregulated policies that saw the steady, low-cost supply of oil and cheap electricity to consumers.

nonstock and nonprofit foundation. The consideration for this sale and transfer was P872.7 million.

The purpose for setting up a foun-dation was to convert Meralco into an electric cooperative to be owned by all its consumers. Every Meralco electric consumer was, in fact, a recipient of a stock warrant from the Meralco Foun-dation. The stock warrants issued by the foundation bear individual serial numbers, and these were supposed to be exchanged with Meralco shares upon the fulfillment of certain conditions.

The impact of the new government’s deliberate actions resulted in endless electric-bill increases and a spate of brownouts that continued up to this day.

Worse, the EO introduced the inju-rious and much-hated power purchase adjustment into the country.

Before its privatization, Napocor, whose income between 1977 and 1985 rose from P0.4 billion to P18 billion in sales revenue, had total assets of P107.2 billion, almost 10 times of what it had in 1977. The new government system-atically broke it up and privatized the majority of its operations, including gen-erations, transmissions and distribution under the guise of ridding government monopoly in the distribution of power.

Strangely, the new government charged the late Energy Secretary Geronimo Zamora Velasco with having allegedly committed corruption, only to be declared later innocent by the Su-preme Court.

Velasco died sometime ago but left

behind a solid reputation of honesty and certitude, as well as his own personal files, copies of which were made avail-able to this writer, who wrote them in his book A Country Imperiled (Tragic Lessons of a Distorted History) the unforgivable sins of those who took over the energy sector.

Here’s an extract of Mr. Velasco’s explosive files:

“…it appears that (the new govern-ment) abolished the ministry upon the advice of Cesar Buenaventura, who had claimed that the Ministry of Energy was ‘the most corrupt’ among the Marcos-era agencies.

“…Cesar Buenaventura was one of the (new government’s closest advis-ers), but he also happened to be the president of Pilipinas Shell at the time. I have no idea as to Buenaventura’s basis for claiming that the ministry was the ‘most corrupt’, but I also have no doubt that he had Shell’s interest in mind when he recommended the ministry’s abolition.

“I could sense that the foreign oil com-panies were never happy with PNOC, not only because Petron led the pricing struc-ture in the oil market, but also because PNOC’s energy-development program, with its emphasis on tapping nonoil sourc-es, threatened to erode the oil companies’ position in the energy market.

“Incidentally, the Queen of England knighted Buenaventura thereafter. Did that have anything to do with the min-istry’s fate?”

E-mail: cecilio.arillo@gmail.com

In that period, the government had succeeded in reducing the country’s 100-percent dependence on Middle East oil from 92 percent in 1973, 71 percent in 1980 and 57 percent in 1984. By 1985 the Philippines stood as the world’s sec-ond-largest user of geothermal power, next to California, resulting further to 44-percent reduction of the country’s dependence on imported oil worth bil-lions of pesos.

On June 19, 1986, four months after the Edsa Revolution, the new revolution-ary government deliberately abolished the Ministry of Energy (MOE) and placed it under its full control.

Executive Order (EO) 215 was then issued, deregulating the energy industry and purposely privatizing its money-making corporations and subsidiaries under it, including the highly profitable National Power Corp. (Napocor); Philip-pine National Oil Corp., a successful Phil-

ippine firm featured regularly in Fortune 500’s Best Corporations; and Petron, which served as a buffer against foreign oil production and distribution monop-oly. Petron then controlled 40 percent of the country’s fuel-distribution network.

Apart from abolishing the MOE, the new government, for whatever reason, hurriedly returned a much larger, more expansive and very profitable Manila Electric Co. (Meralco), gratis et amore, to the Lopezes and their business associates.

It can be recalled during Marcos’s time that, aside from the transfer of all the electric power-generating plants of Meralco to Napocor, the Lopezes and their associates, for financial reasons, divested themselves of their interest in Meralco.

As a consequence, all the shares of stock of Meralco were sold and trans-ferred to the Meralco Foundation, a

bLOOMbERGStephen L. Carter

‘Charlie Hebdo’ and the war on cosmopolitanismBy Francis Wilkinson

Bloomberg View

WEDNESDAY’S attack on the offices of magazine Charlie Hebdo in Paris might have

been an assault on the idea of the West or on the insolence of juvenile cartoons. But it was also an attack on cosmopolitanism, the righteous incu-bator of those, and other, irritants.

Islamic terrorism no doubt has

multiple sources—religious, colo-nial, economic, cultural, psycho-logical. But its soul is devoutly anti-cosmopolitan. The killers, and their sympathizers, seek to contract the public space and private imagina-tions that pluralism expands. They are suspicious of the leveling mix of peoples and the ideal that none is the chosen one. They rebel against the gumbo of religions (and the subversion of them, indiscriminate,

Charlie Hebdo-style, at which cosmo-politanism shrugs). They disdain the interchange, soft and incidental, of cultures and ideas that cosmopoli-tanism enables.

Terrorism is inherently separatist, an act of demarcation as well as an-nihilation. What is the jihadist dream of the caliphate except a circling of old wagons against the new world?

The cosmopolitans seem to get it. Much like they did after Septem-

ber 11, they expressed their support for Parisians in part by sharing the victims’ identity—Je suis Charlie—and filling public space. “Around the world, tens of thousands of people rallied on Wednesday in support of the victims,” Bloomberg News re-ported, “gathering at public squares and French embassies from New York to Hong Kong.”

In New York a crowd braved a bit-ter chill to sing the “La Marseillaise”

in Union Square. Some sang with the perfect French accents of natives nes-tled abroad or of those determined to emulate them, to acquire the tongue, and live in the skin, of another.

The war on cosmopolitanism is waged by fighters familiar with their enemy. (It seems the Charlie Hebdo killers spoke French quite well them-selves.) The core of the September 11 conspiracy emerged from Hamburg, not Afghanistan. Osama bin Laden,

well-traveled child of privilege, was no provincial.

The killers draw strength and tac-tical advantage from such familiarity. But there is another kind of strength in the way their enemies recognize themselves in so many distant mir-rors. In Berlin, London, Madrid, Rio de Janeiro, Tunis and elsewhere, the cosmopolitans came out last night. They understand that their precious tower of babble is under assault.

The British-owned financial-services giant hSBC ruled out growth, mea-sured as the gross domestic product

(GDP), averaging 7 percent or better for the Philippines this year, saying that the govern-ment’s reluctance to spend in tandem with so-called institutional bottlenecks weigh heavily on the country’s appeal as invest-ment destination.  In its New Year report, hSBC scaled back its 2015 GDP forecast for the Philippines to only 5.6 percent, instead of 6.1 percent it initially reported.  For 2014, hSBC anticipates contin-ued growth averaging only 5.7 percent, or slightly lower than an earlier projected ex-pansion averaging 5.9 percent.  Meanwhile, for 2016, hSBC sees the Phil-ippines growing by up to 6.1 percent  All forecast numbers prove lower than that projected by the government for the appropriate years.  “Government spending and invest- ment are volatile, with high standard de-viations…. The controversy regarding the Disbursement Acceleration Program [DAP] means that government expenditure will unlikely contribute to growth in the upcom-ing quarters,” hSBC said.  “While positive from a sovereign risk per-spective as the fiscal deficit is again likely

W AShINGTON—In June, when oil cost $107 a barrel, US employers added a healthy number of jobs—267,000. Now, with oil below $50,

hopes are rising that hiring in the United States is poised to intensify. Goldman Sachs forecasts that if oil stays near its cur-rent price, the economy will add 300,000 more jobs this year than if the price had remained at its June level. Stronger job growth is foreseen at retailers, auto dealers, shipping firms, restaurants and hotels—all of which will likely show gains in Friday’s jobs report for December. From gas-station prices to utility bills, consumers and businesses are now enjoying savings on basic energy costs. It means more people can splurge on purchases from clothing and appliances to vacations and dinners out. That stronger demand will likely require some businesses to step up hiring, which would circulate more money through the economy and perhaps fuel further job growth. Just as critically, cheaper gas is suppressing overall US inflation. Lower prices keep down yields on US Treasury. Lower yields, in turn, serve the housing market by reducing mortgage rates and potentially producing more construction jobs. This week, for example, the average rate on a 30-year fixed mortgage sank to 3.73 percent, its lowest point since May 2013. “These lower oil costs are a tax cut for everybody—ex-cept the energy producers,” said Joseph LaVorgna, chief US economist at Deutsche Bank. “It gives us an acceleration in employment.” Not everyone will benefit. US oil and gas drill-ers, risk layoffs if energy prices don’t recover. Industry suppli-ers such as US Steel, blamed the falling prices in announcing plans this week to lay off 756 workers who make tubing for the oil sector. At the same time, those losses, painful for cities such as houston or Oklahoma City, represent a modest portion of the US job market. The energy sector employs about 1.4 percent of all US employees, according to Deutsche Bank calculations. So what job sectors stand to benefit?

n AutosSALeS of new cars are forecast to exceed 17 million this year, a level not reached since 2005, according to auto ana-lysts. The energy Department says lower gasoline prices will save US households $550 this year—roughly equivalent to four months of lease payments on a 2014 honda Civic. The additional sales will help boost the number of manu-facturing jobs, which total 12.2 million but remain 1.5 mil-lion shy of its prerecession peak at the end of 2007, according to the government. It would also add to the ranks of the 1.2 million people who work at auto dealers. Kirt Frye of Sunnyside Automotive Group, an auto chain in Cleveland, says potential buyers appear increasingly open to buying cars beyond the most fuel-efficient models. “If you’re a new-car buyer and your monthly fuel costs are $50 to $75 less than a year ago,” he said, “you’ve got more flexibility in terms of the monthly investment you can make in an automobile.” Frye plans to hire 15 salespeople for the company’s six dealerships by March, up from about 12 last year.

n ShippingMANY trucking firms are plowing the savings from lower fuel costs back into their businesses. That helps the 4.7 million workers in the transportation and warehousing industries. “They’re actually increasing driver wages,” noted Bob Costello, chief economist at the American Trucking Asso-ciations. Average pay in the transportation sector has risen 2.5 percent over the past 12 months to $20.61 an hour. But some trucking companies, such as Crete Carrier in Lincoln, Nebraska, are now advertising annual pay increases of 13 percent to recruit drivers. Costello said many shipping companies are also replacing their aging trucks, which get as little as 5 miles a gallon, with new vehicles that cost $125,000 apiece—an investment that will likely lead to further hiring by manufacturers that will build the newer trucks.

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2ndFront PageBusinessMirror

www.businessmirror.com.ph

See “HSBC,” A2

Continued on A2

Saturday, January 10, 2015

How lower oil priceS could fuel more Hiring in u.S.

Inflation to remain tame in near term

By Bianca Cuaresma

InflatIon was seen to remain well behaved this year and next, and its outlook

seen basically tame, based on consensus forecast released by private economists and their counterparts at the Bangko Sentral ng Pilipinas (BSP). 

2015 GDP to hit 5.6% in 2015 – HSBC

PHL shares rise to record in longest rally since 2006 PhILIPPINe stocks rallied for a 10th

day, sending the benchmark gauge to a record, as investors speculat-

ed that a slump in oil prices will bolster economic growth. The Philippine Stock exchange index (PSei) rose 0.9 percent to 7,435.09 at of 11:48 a.m. in Manila. The measure is headed for the longest-winning streak since November 2006. Philippine Long Distance Telephone Co. and Bank of the Philippine Islands added at least 2 percent, contributing the most to the gauge’s gains. Crude oil’s 55-percent slump since June, the steepest rout since the global financial crisis, may reduce costs for the Philippines and boost economic growth. The country buys most of its oil requirement from overseas. “The Philippines is being considered by investors as a safe haven,” said Rico Gomez, who helps manage about $1.8 billion as vice president at Rizal Commercial Banking Corp. “We are among the few markets that will ben-efit from low oil prices and that will make economic growth stronger.” GT Capital holdings Inc., which has invest-ments in banks, power, property and auto manufacturing, climbed 4.4 percent, heading for the highest close in two months. Shares in the PSei are valued at 18.4 times 12-month estimated earnings, the highest since November 26, 2014. The gauge has the highest multiple among Asia’s benchmark equity indexes, data compiled by Bloomberg show. Bloomberg News

In the highlights of the most recent Monetary Board (MB) meeting made public only recently, the BSP bared the results of a November 2014 survey of private econ-omists showing a consensus reduction of consumer prices over the policy horizon. In particular, the November 2014 survey showed inflation averaging only 3.9 percent this year, down from 4 percent re-ported the previous month. For 2016 the private econo-

mists anticipate inflation aver-aging 3.8 percent. The anticipated inflation numbers are within the govern-ment’s revised target range for 2015 and 2016 of 2 percent to 4 percent. T he seven-man pol ic y-making MB, likewise, viewed inflation approximating levels anticipated by private econo-mists during the period, as in-dicated in the detailed account of the meeting on December 11 last year.

The MB said the latest outlook projects a lower path for inflation between now and 2016. “The downward adjustment in the forecast inflation path may be attributed to lower oil prices and lower-than-project-ed inflation in October and November 2014,” the central bank said. The BSP is convinced that inflation during the period will likely to settle “slightly above” the midpoint of the 2 percent-to-4 percent target

range in 2015. Meanwhile, for 2016, the in-flation path was seen averaging “close to the lower end” of the 2-percent to 4-percent target for the year. The BSP also said risks to future inflation are now broadly balanced. “Pending petitions for util-ity adjustments and looming power shortage pose upside risks to inflation, while down-side risks could stem from slower global economic activ-ity,” the MBsaid. 

The Philippine unit of the American automaker attributed the increase to the “solid” performance of its Ranger, EcoSport and Everest models. Sales of the Ranger expanded 70 percent to 7,996 units in 2014, from 4,691 units recorded in 2013, while Ford sold 5,203 units of EcoSport which was launched in the country in January last year. Ford said strong demand for 13 Ranger variants throughout the year drove sales of the car brand in 2014. The American automaker continued to expand its nationwide dealer network in 2014, bring-ing the total to 36 full-service dealerships. This includes Ford Alabang, one of the largest Ford dealerships in the Asean region, which opened in November. The Chamber of Automotive Manu-facturers of the Philippines (Campi), of which both TMPC and Ford Philippines are members, has yet to release sales of the local automotive industry in 2014. Campi had initially projected sales in 2014 to grow by 10 percent year on year to 230,000 units. The group revised its forecast upward to 250,000 units due to the solid performance of the local auto industry in January to March last year. In October TMPC had expressed confidence that total industry sales could reach as much 260,000 units due to the steady increase in sales.

Export. . . Continued from A1

The country also did better than Thailand which registered a contraction of 1 percent in export earnings in November; Republic of Korea, -2.1 percent; Malaysia, -2.3 percent; Singapore, -6.4 percent; Japan, -10 percent; and Indonesia, -14.6 percent. “This strong performance of the exports sector during the period was largely driven by growth in manufactures, agrobased, and mineral products,” Esguerra said. Figures from the PSA showed that receipts from electronic products, the country’s main export, expanded 27 percent year on year to $2.54 billion in November. Electronic products accounted for nearly half of the country’s total exports revenue in during the period. PSA data showed woodcrafts and furniture was the second top export earner during the period with export revenue of $359.37 million. Goods classified as “other manufactures” ranked third in terms of export receipts. The country’s top 3 export markets in November were Japan, the US and China. To mitigate risks to export growth, Esguerra said the government should help local businessmen diversify their products and markets through continued export promotion and market-access initiatives. Esguerra said the enhancement of the Department of Trade and Industry’s Export Assistance Network (Exponet). The Exponet can help provide start-up support for more exporters and further ease export-related procedures. The Exponet also aims to provide information on export procedures, documentation and mediation of export trade-related complaints.

Toyota, Ford. . . Continued from A1