businessmirror january 19, 2016
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FOR more than a decade now, the Metro Rail Transit (MRT) Line 3 has been operating way
above its optimal capacity of 350,000 passengers per day, with the highest recorded passenger volume at over 620,000. This naturally resulted in the reduction of the service levels of the railway facility, worsening its state day after day. The solution that the government
adopted years later was to add more trains to the facility. It procured 48 new light-rail vehicles from Chinese manufacturer Dalian Locomotive and Rolling Stock Co., which has so far de-livered two train cars. The delay has earned the ire of commuters, business executives and government officials. Trans-portation Secretary Joseph Emilio A. Abaya could not hold his hors-es, pointing his finger at Metro Rail Transit Corp. (MRTC) for its
“failure” to do its job of adding ca-pacity to the train line. “With mobility a priority for us, we are hoping to provide more available trains to the riding pub-lic through the 48 additional light-rail vehicles—an improvement that should have been done by the sys-tem’s private owner, MRTC, in the mid-2000s—in addition to system upgrades and better maintenance works,” the Cabinet official said.
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MALACAÑANG and Congress have found a way to salvage the initiative to raise the
pension of retired Social Security System (SSS) members—enact the measure empowering the SSS board to increase the contribution of its members.
THE Department of Environ-ment and Natural Resources (DENR) is eyeing the grant in-
centives for its partners in the imple-mentation of the Expanded National Greening Program (E-NGP) starting next year. The E-NGP mandates the DENR to continue the massive reforestation program covering the country’s 7.1
million hectares of open, degraded and denuded forests.
Director Ricardo L. Calderon of the DENR’s Forest Management Bureau (FMB) said the incentive can be in the form of cash or noncash for a “job well done” by NGP partners. “ T his incentive program is currently in the works. It is under the incentive mechanism in the E-NGP,”
said Calderon, also national coordina-tor of NGP.
“Performance can be rated based on the high survival rate of trees planted or for keeping the NGP sites safe from forest fires,” Calderon added.
He said the current NGP contracts with people’s organizations (POs) for site maintenance and protection cover
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PESO EXCHANGE RATES n US 47.7220 n JAPAN 0.4077 n UK 68.0611 n HK 6.1211 n CHINA 7.2482 n SINGAPORE 33.1541 n AUSTRALIA 32.8189 n EU 52.0695 n SAUDI ARABIA 12.7344 Source: BSP (18 January 2016 )
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INSIDE
ART D4
ALAN RICKMAN
FAVORITESON TRACK
GUSTAVE CAILLEBOTTE
DENR eyes incentives for ‘greening’ partners
Belmonte: ‘Sister bill’ holds key to hike in SSS pension
SHOW D2
Abaya, Sobrepeña exchangebarbs anew over MRT 3 mess
SAN ANTONIO—San Antonio stretched its franchise-record unbeaten streak this season to 24-0 by routing Texan rival Dallas,
112-83, on Sunday.The result opened a 13-game gap between
the top and second teams in the National Basketball Association’s Southwest Division, and meant the Spurs were now only one-and-a-half games behind Golden State for the Western Conference and overall league lead.
streak to 33 games dating back to last season. The 36-6 record after 42 games tied the franchise record set five seasons ago.
The Spurs won easily despite the loss of Tony Parker late in the third quarter to right-hip soreness; the same injury that forced him to sit out two games at the start of the month. Wesley Matthews led Dallas with just 12 points.
Oklahoma City cruised to a 99-74 win over Miami, with Westbrook finishing with 13
Dwyane Wade, who missed the previous game due to shoulder soreness, led the Heat with 22 points on his 34th birthday.
Denver’s Randy Foye hit a go-ahead three-pointer with 21 seconds left to cap a come-from-behind 129-126 victory over Indiana.
The Nuggets came back in the second half to get their seventh straight win at home over the Pacers. Danilo Gallinari had 23 points. Myles Turner scored a career-high 25 points for Indiana.
Houston pulled away in the second half to rout the Los Angeles Lakers, 112-95. James Harden had 31 points for the Rockets.
Minnesota emphatically ended a run of nine straight losses and posted its first win of 2016 by beating Phoenix, 117-87. AP
Spurs extend franchise-record unbeaten streak
C1C1C1C1 | | TTUESDAYUESDAYUESDAYUESDAYUESDAYUESDAYUESDAYUESDAYUESDAYUESDAYUESDAY, J, J, J, J, JANUARYANUARYANUARYANUARYANUARYANUARYANUARYANUARYANUARYANUARYANUARYANUARY 19, 2016 19, 2016 19, 2016 19, 2016 19, 2016 19, 2016 19, 2016 19, 2016 19, 2016 19, 2016ANUARY 19, 2016ANUARYANUARY 19, 2016ANUARY
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FAVORITES ON TRACK
Conference and overall league lead.Elsewhere, Russell Westbrook posted his
second straight triple-double to lead Oklahoma City to a big win over Miami, while a three-pointer with 21 seconds left gave Denver victory over Indiana in a high-scoring contest.
San Antonio’s LaMarcus Aldridge scored 23 points as the Spurs stretched their unbeaten
over Miami, with Westbrook finishing with 13 points, 15 assists and 10 rebounds. It was his fifth triple-double of the season and the 24th of his career.
Kevin Durant had 24 points and 10 rebounds for the Thunder, which set a season best for least points allowed. It was also the least points scored by the Heat this season.
FAVORITES ON TRACK
The most dominant players in tennis entered
the season’s first major after contrasting
preparations, with Serena
Williams having to overcome a
left-knee problem that limited her court time and Novak Djokovic
warming up witha run to the title
at Doha.
Stephens exits, again, Stephens exits, again, in Aussie Open 1st rdin Aussie Open 1st rd
NOVAK DJOKOVIC opens his title defense with a straight-set victory. AP
SLOANE STEPHENSyields to China’s Wang
Qiang (below). AP
B J P�e Associated Press
MELBOURNE, Australia—ELBOURNE, Australia—Serena Williams and Serena Williams and Novak Djokovic opened Novak Djokovic opened their title defenses with their title defenses with straight-set wins at the straight-set wins at the
Australian Open in back-to-back matches Australian Open in back-to-back matches on Rod Laver Arena. The most dominant players in tennis entered the season’s first major tennis entered the season’s first major after contrasting preparations, with after contrasting preparations, with Williams having to overcome a left-Williams having to overcome a left-knee problem that limited her court knee problem that limited her court time and Djokovic warming up with a time and Djokovic warming up with a run to the title at Doha.
Williams made a bright start, in a way, Williams made a bright start, in a way, holding up one finger and twirling in her holding up one finger and twirling in her neon yellow two-piece outfit to celebrate neon yellow two-piece outfit to celebrate her 6-4, 7-5 win over Camila Giorgi on her 6-4, 7-5 win over Camila Giorgi on Monday. Djokovic had a 6-3, 6-2, 6-4 win Monday. Djokovic had a 6-3, 6-2, 6-4 win over Chung Hyeon of South Korea.
Williams and Djokovic each won three Williams and Djokovic each won three of the four major titles last season, with of the four major titles last season, with Williams falling two matches short of a Williams falling two matches short of a calendar-year Grand Slam when she lost calendar-year Grand Slam when she lost in the US Open semifinals and Djokovic’s in the US Open semifinals and Djokovic’s only loss coming in the French Open final.only loss coming in the French Open final.
Williams withdrew from the Hopman Williams withdrew from the Hopman Cup because of inflammation in her knee, Cup because of inflammation in her knee, playing just one set in Perth.
Yet, she dropped just one service Yet, she dropped just one service game against No. 34-ranked Giorgi, who game against No. 34-ranked Giorgi, who struggled with 12 double-faults, including struggled with 12 double-faults, including one on the decisive break point in the one on the decisive break point in the 11th game of the second set.
Williams fired two aces and a service Williams fired two aces and a service winner in the last game.
“I haven’t played a competitive match “I haven’t played a competitive match in a really long time, but I think it was in a really long time, but I think it was really good for me to come out here,” really good for me to come out here,” Williams said. “I was able to stay in it and Williams said. “I was able to stay in it and stay calm today and I think that’s what stay calm today and I think that’s what matters most.”
Williams said she needed the break to Williams said she needed the break to recharge at the end of last season and felt recharge at the end of last season and felt OK about her limited preparation.
“I haven’t played in a long time, but I “I haven’t played in a long time, but I have been playing for 30 years, so it’s kind have been playing for 30 years, so it’s kind of—I try to focus on that,” she said.of—I try to focus on that,” she said.
Two-time Wimbledon champion Petra Two-time Wimbledon champion Petra Kvitova earned the distinction of winning Kvitova earned the distinction of winning
the first completed match at the the first completed match at the tournament when she beat Thai tournament when she beat Thai
qualifier Luksika Kumkhum, qualifier Luksika Kumkhum, avenging her upset avenging her upset
three-set loss in the three-set loss in the first round here first round here
in 2014.
Kvitova, who had to withdraw from a warm-up tournament in China because of a stomach virus, said her preparation was disrupted and she was nervous ahead of the rematch with Kumkhum.
“Now I can breathe a little bit normally,” she said. “I got really nervous before the match. I didn’t sleep well actually. The memories from two years ago were a little bit difficult.”
No. 24 Sloane Stephens, who beat Serena Williams in the 2013 Australian Open quarterfinals, lost, 6-3, 6-3, to Chinese qualifier Wang Qiang, while No. 26 Anastasia Pavlyuchenkova and No. 27 Anna Karolina Schmiedlova also went out in the first round.
Djokovic’s bid for a sixth Australian Open title started in temperatures of 34 Celsius (93 Fahrenheit), and he became annoyed with himself and his play at times, including three double-faults. Overall, though, he was consistently too good for one of the up-and-coming players on tour. He said everything started looking up for him when he became a dad back in 2014, then joked about maybe having another baby. Sixth-seeded Tomas Berdych, a semifinalist last year, opened his 50th consecutive major by beating Yuki Bhambri of India, 7-5, 6-1, 6-2, and No. 7 Kei Nishikori had a 6-4, 6-3, 6-3 win over Philipp Kohlschreiber. Also advancing were No. 12 Marin Cilic, No. 15 David Goffin, No. 19. Dominic Thiem and No. 26 Guillermo Garcia-Lopez. No. 22 Ivo Karlovic was the first of the men’s seeds to exit the tournament when he retired due to a left-knee injury while trailing Federico Delbonis, 7-6 (4), 6-4, 2-1.
The hours before the tournament began were overshadowed by news reports alleging match-fixing that had gone unchecked.
The Association of Tennis Professionals (ATP), which runs the men’s tour, and Nigel Willerton, head of the Tennis Integrity Unit, represented the four governing bodies of tennis—ATP, Women’s Tennis Association, Grand Slam Board and International Tennis Federation—in a joint news conference to reject the allegations published by the BBC and BuzzFeed News.
The reports, citing secret files, said that in the last decade 16 players—all at some stage ranked in the top 50—have been repeatedly flagged to the integrity unit.
ATP Chairman Chris Kermode said tennis authorities “absolutely reject any suggestion that evidence of match-fixing has been suppressed for any reason, or
MELBOURNE, Australia—Sloane Stephens figures ELBOURNE, Australia—Sloane Stephens figures she’s got plenty more Grand Slams ahead of her she’s got plenty more Grand Slams ahead of her to improve upon her performance at this year’s to improve upon her performance at this year’s
Australian Open.The 2013 semifinalist exited in the first round on The 2013 semifinalist exited in the first round on
Monday, losing 6-3, 6-3 to Chinese qualifier Wang Monday, losing 6-3, 6-3 to Chinese qualifier Wang Qiang, who is ranked No. 102.Qiang, who is ranked No. 102.
The match started out well for 22-year-old The match started out well for 22-year-old Stephens, seeded 24th, who raced to a 3-1 lead but Stephens, seeded 24th, who raced to a 3-1 lead but then lost 10 straight games as she struggled to find then lost 10 straight games as she struggled to find momentum and regain focus.momentum and regain focus.
“Today was definitely one of those bad days,” Stephens “Today was definitely one of those bad days,” Stephens said. “Nothing was going my way. A lot of shots that I’d said. “Nothing was going my way. A lot of shots that I’d like to make, that I normally make, weren’t going in. A lot of like to make, that I normally make, weren’t going in. A lot of opportunities slipped away.”opportunities slipped away.”
The early exit comes after a solid start to the year for Stephens, The early exit comes after a solid start to the year for Stephens, who is seen as part of the next generation of rising American players.who is seen as part of the next generation of rising American players.
Earlier this month, Stephens won her second Women’s Tennis Earlier this month, Stephens won her second Women’s Tennis Association title in Auckland at the ASB Classic after having won her first Association title in Auckland at the ASB Classic after having won her first title a few months earlier in Washington.title a few months earlier in Washington.
After Auckland, she withdrew from the Hobart International, an After Auckland, she withdrew from the Hobart International, an Australian Open tune-up, citing a viral illness, but did not blame Monday’s Australian Open tune-up, citing a viral illness, but did not blame Monday’s loss on health issues.
“I felt fine,” Stephens said. “It just kind of got away from me.”“I felt fine,” Stephens said. “It just kind of got away from me.”The hard-hitting American gained a degree of stardom at the 2013 Australian The hard-hitting American gained a degree of stardom at the 2013 Australian
Open, where she reached the semifinals by beating Serena Williams and then Open, where she reached the semifinals by beating Serena Williams and then followed-up by reaching the quarterfinals of Wimbledon that year.followed-up by reaching the quarterfinals of Wimbledon that year.
Since then, Stephens hasn’t advanced past the fourth round at a Grand Slam and Since then, Stephens hasn’t advanced past the fourth round at a Grand Slam and has had a few first-round exits, including at last year’s Australian and US Opens.has had a few first-round exits, including at last year’s Australian and US Opens.
“I’m disappointed that I lost here but if I play until I’m 35, I have plenty more “I’m disappointed that I lost here but if I play until I’m 35, I have plenty more Grand Slams to go. So I just have to look past it,” said Stephens, who was in good Grand Slams to go. So I just have to look past it,” said Stephens, who was in good spirits despite the loss.
Asked if she really planned to play until she’s 35, Stephens laughed.Asked if she really planned to play until she’s 35, Stephens laughed.“No! But it sounded good.” she said, adding, “Of course, I’m going to be here “No! But it sounded good.” she said, adding, “Of course, I’m going to be here
for a long time.” AP
SPORTS C1
FED TO DEATH SOFTDRINKS TAX PROPOSALSPURS SWEETSOUR DEBATE
BMReports
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Second of three parts
LAWMAKER Estrellita B. Suansing’s bill may lead beverage makers to sing a swan song for what she says causes over-weight kids: soft drinks.
Suansing, representative of the First District of Nueva Ecija, is the main author of House Bill 3365, which aims to lessen the intake of sugar-sweetened beverages that can help decrease the chance of diabetes from occurring. The bill would lean hard on soft-drinks manufacturers by adding a P10 excise tax on carbonated drinks and sugar-sweetened beverages on top of the already imposed 12-percent value-added tax. Besides its health slant, the excise tax will also increase ad-ditional revenue for the government. The bill projects around P34.35-billion additional funds in government coffers on the first year of implementation should it become a law. Of course, soft-drink manufacturers and the sugar industry
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HB 6112The so-called sister bill of the SSS pension-hike proposal, which, if passed, could convince P-Noy to raise SSS pension
CALDERON: “Performance can be rated based on the high survival
rate of trees planted or for keeping the
National Greening Program sites safe from forest fires.”
Ironically, the failure of the Sen-ate to pass this “sister bill” of the SSS pension-hike proposal also led to the now-controversial presiden-tial veto of the proposed P2,000 hike in SSS pension. Speaker Feliciano R. Belmonte Jr. said the sister bill, House Bill (HB) 6112, will be passed by the Senate this time. Earlier, Belmonte and House Ma-jority Floor Leader and Liberal Party (LP) Rep. Neptali M. Gonzales II of Mandaluyong City said there should have been no problem in passing the SSS pension-hike bill into law, if
only the Senate approved the accom-panying measure that authorized the SSS board to increase the premiums of its members. “When we approved the bill that increased the pension benefits by P2,000, we, likewise, approved an ac-companying bill that authorized the SSS board to increase the premiums of its members. While the Senate ap-proved the pension increase, it failed to approve the accompanying bill. Thus, the President opted not to play politics and, instead, was forced to veto the bill to prevent the SSS from being bankrupt,” Gonzales said. Belmonte said the President had no choice, as the SSS could not af-ford the pension hike. “The House passed a sister bill giving the SSS board powers similar to that of the GSIS [Government Service Insur-ance System] board to increase pre-miums, but it was not yet approved by the Senate. P-Noy [President Aquino] chose to be a fiscally re-sponsible leader, and not just one driven by current politics.” Belmonte said he had a meet-ing with Senate President FranklinM. Drilon, and the LP stalwart
are not particularly fond of the said bill. The sector notes that the im-position of excise tax would, indeed, lessen consumption with a heavier price on soft drinks. This, in turn, would decrease sales and result in net revenue losses.
The Beverage Industry Associa-tion of the Philippines claims the imposition of the excise tax and decreased consumption of sugar-sweetened beverages will not solve the “obesity challenge,” as the con-sumption of the said drinks only affects a small portion of an indi-vidual’s nutritional intake.
Sugar-sweetened beverage sales increase at a rate of 3 percent per annum globally. According to a study by Coca-Cola Co., world aver-age consumption levels of its bever-age products are at 94 portions per person per year. The Philippines is at 131 portions per person per year, the study revealed.
EvidenceTIM LOBSTEIN in a commentary in September 2014, noted, “Recent systematic reviews of literature confirm the link between increased intake of free sugars, particularly in the form of sugar-sweetened beverages and unhealthy weight gain in both children and adult, while reducing consumption of sugar-sweetened beverages has been shown to reduce weight gain in children, particularly, in those who are already overweight.”
“The weight of evidence has been sufficient for many scientific associations and expert bodies to recommend the reduction in free sugars intake; in particular, the con-sumption of sugar-sweetened bever-ages as a public-health policy goal,” wrote Lobstein, director of Policy of the London, United Kingdom-based World Obesity Federation.
According to the Seventh Na-tional Nutrition Survey, the con-sumption of carbonated beverages by preschool children, school-aged
children and adolescents are rela-tively high in the Philippines. Soft-drink consumers among male preschool children average at about 14.07 percent, while fe-males are at 13.46 percent; 16.20 percent consume soft drinks for male school-aged children, with females averaging higher at 16.73 percent and male adolescents com-prise 24.66 percent, while females average 26.67 percent. The study stated that soft drinks were the go-to drinks of most Filipi-no children during snacktime, since they are common energy source and they are the most affordable and readily available. Due to their popularity, soft drinks became the most commonly consumed food item among Filipino children.
Health Undersecretary Ken-neth Hartigan-Go cautions against pinning the obesity epidemic to soft drinks.
Citing the 2008 National Nutri-tion Survey, he said the most com-monly consumed food of adults and adolescents identified soft drinks in the eight and seventh positions, respectively. About a quarter of all adolescents and adults consume the product on a daily basis, he added.
“The same survey identified rice to be consumed by around 94 per-cent of all individuals daily. Does this mean that rice is a strong fac-tor to the development of obesity? Or that consumption of sweetened beverages is a stronger factor?” Hartigan-Go believes “there is a correlation between con-sumption and obesity.” “But to high-light any specific food item as a fac-tor to its increase would require a study that is currently not done by the government.”
Social networkSOCIAL networks can also contrib-ute to obesity.
Having a friend suffering from obesity increases chances of acquir-ing the medical condition by 57 per-cent. This percentage also applies to
family members and relatives but at a lesser rate, one study showed. “Family lifestyles, like shar-ing similar habits in eating and physical activities, peer pressure, lifestyles that limit your access to healthy foods and physical activi-ties” also cause obesity, according to Ivy D. Ramallosa, a registered nutritionist-dietician. Having a social network that encourages a lifestyle pattern that contributes to obesity doesn’t help, she added. Having a sedentary life-style, lack of physical activity, lack of sleep and day-to-day stress are also contributing factors, Ramallosa said.
She added that extended hours watching television can also contrib-ute to a person being overweight. Lobstein noted in his paper for the World Health Organization (WHO) that advertising in media contri-butes largely to children’s consump-tion of soft drinks.
Voluntary measures in the UK to discourage consumption “still per-mit advertising in the media seen by children, e.g., family TV pro-gramming and social digital media to which children gain access.”
Lobstein cited social media as an alternative platform to pro-mote soft-drinks consumption. “A systematic review of children’s exposure to food and beverage marketing messages found consis-tent evidence that exposure had continued at high levels” from the years 2007 to 2012, Lobstein said. “The review concluded that the self-regulatory criteria [set by companies] were not sufficient to ensure children were protected from the advertising of foods and beverages high in fats, sugars and salt, and that government-led cri-teria for restricting marketing would be preferable.”
Digging deeperACCORDING to Hartigan-Go, the private sector, where soft-drinks manufacturers belong to, is “an im-portant partner in pursuing strate-
gies that will improve the health of entire communities sustainably.” “Recognizing that [while] our methods are different, the mo-tivation is ultimately the same,” Hartigan-Go said. “Ensuring that the population is healthy, educated, productive, creative and happy is a mutual interest between the public and the private sectors.” “Will stopping production of goods eventually lead to a reduc-tion in the prevalence of obesity?” Hartigan-Go posed. “This is a myopic perspective. As long as demand from consumers is there, supply will find a way to meet it. This forces us [in the health sec-tor] to dig deeper.”
He explained further: “Our cur-rent paradigm identifies a lack of alternative choices that are consistent with healthier behav-ior, and requires reevaluation of what component is harmful if consumed in excess.” Hartigan-Go notes that sugar-sweet beverages is not the sole factor that contributes to obesity, which he calls an “epidemic.” Obesity “is affect-ed by the complex interaction between the environment, genetic factors and human behavior.”
Ramallosa, unit manager of the Makati Medical Center’s weight and wellness unit, agrees, pointing to “eating patterns, such as irregular eating schedules; skipping breakfast; snacking at bedtime; eating too fast; eating too much when emotionally stressed, bored; or angry; mindless eating; and eating twice the usual amount when pregnant.”
She notes that sugar-sweetened beverages are not the only food items that contribute to the increase of unwanted fat.
“Excessive calorie intake leads to obesity,” Ramallosa said. “Sweetened beverages and fast foods are loaded with calories coming from sugars and fats without other important nutrients. Drinking or eating too much of them may lead to increased calorie intake for the day.”
SSS pension… C
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Fed to deathBusinessMirror www.businessmirror.com.ph Tuesday, January 19, 2016A2
BMReports
committed that “the Senate will do its best to pass HB 6112.”
After this, Congress will write a letter to Malacañang to urge Presi-dent Aquino to order the SSS Board to implement a P1,000 hike in SSS pension. The amount is a compro-mise to the original P2,000 increase, so—together with the passage of HB 6112—the viability of SSS would be safeguarded. “We want to pass it [HB 6112 into law] now...[so the SSS] will give the P1,000 pension hike,” Belmonte said, adding, “the SSS board, itself, can approve it [the pension hike] without having to pass through Congress once the bill empowering the SSS Board to increase premiums is passed.”
The SSS would need P28 billion a year to cover the P1,000-pension hike benefiting 2.1 million pensioners. “They have greater authority to recover [from the revenue lost due to pension increase] through increased premium, through changing some limitations that exist now in the SSS law, and so forth,” he said. Congress has resumed session last Monday but will adjourn again on February 6 as part of the preparation
for the national and local elections in May. Lawmaker only have eight ses-sion days left. Last Thursday President Aquino has informed Congress he has ve-toed the enrolled HB 5842, which provides for a P2,000 across-the-board increase in the monthly pension of SSS pensioners and adjustment of the minimum monthly pension from P1,200 to P3,200, for members who have contributed the equivalent of 10 credited years of service (CYS), and from P2,400 to P4,000, for those with at least 20 CYS.
As it is now, increasing SSS pen-sion, of any value, is not within the realm of probability, as this will reduce the system’s ability to gener-ate funds for future pensioners, the SSS management said.
An increase is only possible if the proposed bill is revised, putting therein a solution as to where the SSS will get the funds to finance the proposed hike in pension. Estimated losses to the institu-tion, as earlier announced by the SSS, is likely to hit P56 billion per year, rising by about 10 percent in losses per succeeding year, as more workers move into the pensioners category annually.
SSS President and CEO Emilio de Quiros Jr. said that “there is no problem” in implementing a pen-sion hike, if they are to provide the financial means to the bill. What de Quiros has in mind is a hike in the contributions of members; from the current 11-percent contribution rate of SSS up to 15.8 percent to fund potential adjustments.
“What we are saying is that it is easy to give increases to pension whether it be P500 or P1,000, etc. But it has to have a parallel contribu-tion increase. If there is a counter-part contribution increase, there will be no problem,” de Quiros said. The contribution rate of SSS is considerably lower than those of its neighbors in Asean, including Vietnam at 25 percent.
Market volatilities in playTHE SSS’s fund life is now projected to be up to 2027, meaning that funds will be depleted 11 years from now contrary to the earlier presentation to Congress, which indicated that funds will be de-pleted by 2029 should the pension hike is approved De Quiros said the change in the projected fund life is due to current low market sentiment and divestment plans.
SSS invests its finances in dif-ferent financial vehicles to derive more funds to support its opera-tions. Data showed that in terms of SSS’s investment portfolio, 39.12 percent are in government securi-ties; 23.59 percent are in equities; 15.05 percent are lent as salary loans; 7.6 percent are deposited in banks; 7.32 percent in corporate bonds and notes; 4.32 percent in real properties; and 2.95 percent as housing loans. In turn, its investment income from January to October 2015 yielded an annualized return of 7.04 percent. The SSS last increased the pension of its members in July 2014 by 5 percent.
PEOPLE pass by the Social Security System (SSS) branch office in Makati City. The SSS board on Monday hailed President Aquino’s decision to veto the proposed P2,000 pension hike for more than 2 million retirees, saying the agency cannot provide across-the-board pension hike without raising member contributions. NONIE REYES
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MOBILE-PHONE technology can help expand the market for consumer goods the way it
disrupted the business model in providing small consumer loans.
� e BusinessMirror last week pub-lished a feature on how mobile-phone tech-nology is being tapped to help the poor in the countryside to gain access to small con-sumer loans that can be extended by banks even without a collateral.
� is trend of expanding the market to include all mobile-phone users nationwide is also emerging in the Philippine retail business for consumer goods. � us, while banks partner with mobile-phone com-panies to extend loans to the unbanked poor, retailers are also partnering with the same telcos to expand their reach to rich consumers who now shop online through their mobile phones.
According to Heidi Garayblas of Voyager Innovations, it is imperative for retailers to come up with their own mobile applica-tions so that more of the so-called mobile � rst consumers can shop online for con-sumer goods, like clothes, gadgets, bags and accessories.
By the end of 2016, it is estimated that 30 million smartphones and tablets in the Philippines will form part of the target mar-ket for mobile � nancial services, marketing campaigns and retail goods.
“With the increase in smartphone us-ers in the Philippines, we are seeing a very high demand for consumer retailers to launch their own mobile app, and promote its download and usage. Mobile applications do not only serve as a channel to promote products but also as an e� cient sales chan-nel, as a form of distribution for their prod-ucts, and as a way for payment. We are see-ing major growths in e-commerce, � nancial services and online-banking transactions. It’s a mobile-� rst market,” Garayblas said.
Garayblas is the business unit head for the SafeZone service of Voyager Innova-tions, the digital innovations arm of PLDT and Smart.
Mobile fi rstTHE term mobile � rst was coined to refer to the strategies of companies to design their products for smartphones � rst before making corresponding versions for desk-tops and laptops. Mobile-� rst consumers refer to that segment of the market who use their smartphones � rst in making Inter-net searches, social-media interactions and shopping. � is segment of the market had been increasing the past few months, not only in the Philippines but in the world.
According to the Groupe Speciale Mo-bile Association’s (GSMA) Global Mobile Economy Report for 2015, the worldwide transactions made through mobile phones continue to increase not only in terms of the total amount of the transactions, but also in the percentage that mobile-phone com-merce constitutes out of the total worldwide e-commerce.
In 2014 total e-commerce in the world, or total sales made through the Internet, amounted to $1.47 trillion. About 14 percent of this amount, or $204 billion, came from transactions made through mobile-phones.
Based on current trends, the GSMA pre-dicts that by 2018, total e-commerce would reach $2.36 trillion, and 26 percent of this amount, or $626 billion, would have been from mobile-phone transactions.
Much of these e-commerce transactions and mobile-phone commerce will be in Asia, GSMA said, as can be gleaned from the in-creasing number of mobile-application sales and downloads.
“� e global app economy is growing rap-idly, with revenues from apps and related products and services reaching $86.3 billion in 2014, representing a 26-percent increase from 2013. Much of this growth is coming from developing markets, such as India and China, and out of a total global mobile devel-oper population of 2.3 million, Asia is home to around a third,” the report said.
GSMA represents the interests of mobile operators worldwide, uniting nearly 800 op-erators with more than 250 companies in the broader mobile industry, which also in-
cludes handset and device makers, software companies, equipment providers, Internet companies and other organizations in re-lated industries.
Trend in AsiaTHERE are an estimated 700 million Inter-net users in Asia today, and another 1 billion Internet users in Asia are expected within the next 15 years, making Asia the largest market for online-shopping sites.
In 2015 an average of 22-percent increase in shopping across 13 Asia-Paci� c markets was registered, according to a study by Visa. � e highest growth rates in online shopping were experienced in Indonesia, China and Taiwan, with growth rates of 36 percent, 34 percent and 28 percent, respectively.
But the Philippines is not far behind, with a growth rate in online shopping of around 25 percent, mainly due to purchases of transportation services through GrabCar or Uber, and downloads of mobile-phone ap-plications on Google Play.
United States-based analytics � rm Fico is even more upbeat on the growth of the market for � nancial technology and con-sumer goods sold through mobile phones. Fico, which compares and forecasts risks for banks and other companies through the analysis of data, also has numerous telecom-munications companies in Asia as its clients.
Burton Crapps, Fico country director for the Philippines, said the mobile-� rst seg-ment of the Philippine market will become a very important market not only for banks, but also for retailers.
“It is one of the most exciting segments in terms of consumerization. � e telecom-munications companies have very huge ac-cess to the population of the Philippines that they have more penetration than all the lending companies combined,” Crapps said.
Threats of online fraudMOBILE data charges and threats of hack-ing and credit-card fraud, however, could be prohibitive for Filipino mobile-� rst consum-ers, which could hamper the growth of this market segment in the Philippines.
� is is why mobile-phone operators and designers of mobile applications take pains to make their mobile-phone applications and products as accessible as possible, in anticipation that within the next two years, mobile-� rst consumers will form a signi� -cant portion of the Philippine retail market.
Garayblas said this is why Voyager’s Safe-Zone service does not charge mobile shop-pers for the data, which is sponsored by the retailers, to entice even more mobile-� rst consumers to surf for the best deals using their mobile phones. “SafeZone, our service, allows users to conveniently inquire, trans-act and shop anytime, anywhere without data charges, as the data usages is sponsored by the retailers. We also empower retailers to e� ciently and e� ectively promote the download and usage of their mobile applica-tion or web site. By enabling enterprises to be digitally present and lowering the barrier for their connection, SafeZone brings more usage and accessibility for their products and brands,” she said.
On the issue of credit-card fraud, on the other hand, Fico is working with � rms in Asia to use the geolocation abilities of mobile devices in validating whether a con-sumer’s phone is in the same place as where a credit card is being used.
Retailers can use mobile technology to grow business
A3
[email protected] Tuesday, January 19, 2016
Estimated number of smartphone and tablet users in the Philippines by the end of 2016
30M
BusinessMirror [email protected], January 19, 2016A4
BMReportsDavao City gets 3 major infra projects
The projects are not expected to be finished this year, but when completed, these will result in changes in transportation routes, establishment of new terminals and result in the development of a planned area for educational insti-tutions and additional residential zones, alongside transportation route that goes to the industrial zone, Councilor Danilo Dayang-hirang said.
The zoning of educational insti-tutions in barangays Mintal and Tugbok west of downtown has been going on with the relocation or ex-pansion of topnotch universities to these areas to help develop new urban centers to the northwest of the city, he said. Further north of these barangays is a major road-construction project funded by the Japan International Cooperation
Agency, which has constructed two additional highway lanes from Calinan, 30 kilometers north of downtown, and to make a left turn in Tugbok to cut a new highway go-ing to the northern hinterlands of this city in a combination of open highway and a tunnel road.
The project is eyed as a bypass or diversion road and is intended to replace the first diversion road connecting the southern suburbs through the Ulas-Bangkal junc-tion, and the northeastern suburbs through the Panacan-Sasa junc-tion. The diversion road that was supposed to be an express lane has since turned into a slow-moving channel on busy daylight hours.
The Calinan-Tugbok bypass road is expected to speed up the movement of goods from the northwestern production ar-
eas connecting Bukidnon to the northeastern barangays host-ing the industrial zone and sea-port areas connecting Davao del Norte. The two projects in the Mintal-Tugbok area and the Cali-nan-Tugbok area may also speed up the development of an urban center in the northwest of the city. Running parallel to these projects are the ongoing wide highway construction near the Arakan, North Cotabato, junc-tion down to the city’s western district of Toril, to connect the
production areas of Davao del Sur and the Cotabato provinces with the northwestern section of the city connecting with Bukidnon.
The biggest project to be imple-mented soon is the 200-hectare reclamation along the coastal area of downtown currently dotted with one of the biggest habita-tion by squatters. Proponents of the project would develop a new port area and business and office buildings.
Dayanghirang said these proj-ects, once completed, may effect
a major change in traffic and commuting habits, and may also redirect some city and national government agencies to certain areas to decongest the city.
“Government and business transactions may also see some changes in their locations, maybe with a new city to be developed in Calinan or in Toril,” he said.
He said new subdivisions and residential areas were being built along the Buhangin area going to-ward Bunawan in the northeast, in a direction running alongside
the development of the industrial zone. “This will help distribute the location of people, not just concen-trated in the southern portion of the city where the residences are mostly found,” he said.
“If I were to decide, we have to formulate an urban development plan that would include the town of Malita in Davao Occidental in the farthest south of the region, to the town of Caraga in Davao Oriental to the farthest eastern part of the region,” he said. Dayanghirang is the city council’s majority leader.
Government and business transactions may also see some
changes in their locations, maybe with a new city to be developed.”
—Dayanghirang
BEAUTY OF NATURE In this �le photo, locals of Samal Island in Davao del Norte enjoy the serenity of their place. Completion of the major infrastructure projects will help attract more foreign and local visitors to Davao. NONIE REYES
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His statement, however, was debunked by MRT Holdings Inc. Chairman John Robert L. Sobrepe-ña, who said his camp was never indifferent to the qualms of the 560,000 commuters who ride the train facility every day.
T he businessman sa id his company had sought for the gov-ernment’s approval of improving the railway system as early as 2000. The state, however, failed to respond to this.
“You cannot blame us, because we have done all our part. We have no less than three proposals to improve the train—one in 2000, another in 2005 and another thereafter,” he said. “But the gov-ernment failed to reply to any of our proposals; so why blame us?”
The last proposal was addressed to the transport chief, himself, Sobrepeña pointed out.
“Up until today, we have not yet received any reply to our lat-est proposal to rehabilitate and improve the services of the MRT,” he quickly added. Sobrepeña was referring to his group’s “quick fix” solution to make the train system “safe for public transport.”
Together with foreign firms Sumitomo Corp. of Japan and Glo-balvia Infrastructuras of Spain, Metro Global Holdings Inc. is pro-posing to “fix” the ailing system through a $150-million invest-ment that involves the procure-ment of a total of 96 new train cars and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers. Under the pro-posal, a single point of responsibil-ity will be implemented, meaning the rehabilitation and the mainte-nance of the line will be handled by a single company.
“So, how can he be finger-point-ing at this point, when he should be pointing the finger at himself?” Sobrepeña said. “He’s completely
wrong, again, as usual.” There are two other proposals pending before the transportation depart-ment—one from Metro Pacific Investments Corp. (MPIC), and another from German firms Sc-hunk Bahn -und Industrietechnik GmbH and HEAG Mobilo GmbH.
Under its proposal, MPIC will shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.
The group of businessman Man-uel V. Pangilinan, which earlier entered into a partnership agree-ment with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.
The venture would effectively
expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day, from the current 350,000 passengers daily.
It was submitted in 2011, but
the transportation agency’s chief back then rejected the proposal. The group revived its proposal before Congress in 2014.
On the other hand, Schunk is seeking to place the whole train system under a massive transfor-mation program to augment its capacity and to provide a safe and comfortable travel to commuters
from the northern and southern corridors of Metro Manila.
The P4.64-billion proposal, submitted in February last year with Filipino partners Comm Builders and Technology Phils. Corp., calls for the complete over-haul of the 73 light rail vehicles of the MRT; the replacement of the rails; the upgrading of the line’s ancillary system; the upgrade of the track circuit and signal-ing systems; the modernization of the conveyance system; and a three-year maintenance contract. Under the amended build-operate-transfer law, the government has to inform the proponent whether it accepts or rejects an unsolicited proposal within 120 days.
“They are not following the
law, as they are not replying to us. Then, when problems happen, they will be blaming us. So, now, we are studying our legal options, because they are practically not following the law with regard to the MRT,” Sobrepeña said.
The MRT is in a chronic state of decay, with the 16-year-old trains already maxed out of their rated capacities and the rails already experiencing difficulties in han-dling 560,000 passengers per day.
Currently, there are about 16 train sets operating in the MRT. This means that out of the 73 light rail vehicles that the train line has on its depot, only 48 train cars ply the North Edsa-Taft Ave. train route. The government is set to re-ceive all the 48 Chinese-manufac-tured trains by January next year.
“We are aiming to have the new trains ready by the end of first quarter this year, so hopefully, by March, the new trains from Dalian will help lessen the queues in the MRT,” Abaya said. “Com-muters will experience increased passenger convenience and ser-vice reliability with the arrival of more new light rail vehicles. After the necessary checks on the different electrical components have been completed within the week, the vehicle will be subjected to dynamic testing to ensure the reliability of parts. This includes the required 5,000-kilometer run, which will be done on the main line during nonrevenue hours.”
Once the 48 new train cars come in, MRT 3’s trips per hour will increase from 20 to 24, which will translate to a 60-percent rise in the number of passengers per hour per direction.This means that there will be 37,824 passengers who can avail themselves of the rail service every hour heading to-ward one direction. Currently, only about 23,640 people ride an MRT service per way every hour. But that number still depends on how many trains are running that day.
Abaya, Sobrepeña exchange barbs anew over MRT 3 mess
How can he [Abaya] be finger-pointing at this point, when
he should be pointing the finger at himself? He’s completely wrong, again, as usual.”—Sobrepeña
B M T. C | Mindanao Bureau Chief
DAVAO CITY— ree big infrastructure projects here are expected to decongest
the present poblacion and speed up development of this city’s hinterlands.
ED DA
VAD
[email protected] Tuesday, January 19, 2016 A5
AseanTuesday
$22.9M
$2.64B
Jokowi under pressure to revamp terror laws after Jakarta attackTHE first Islamic State (IS)-linked
attack on the world’s most popu- lous Muslim nation puts more
pressure on Indonesian President Joko Widodo to give the military a bigger role and add legal heft to antiterror-ism efforts.
Unlike some countries facing threats from IS, authorities in In-donesia lack laws to arrest returnees from Syria and Iraq. Giving security forces greater leeway to lock up Is-lamists is a sensitive issue in the Southeast Asian nation, which un-til 1998 was a military dictatorship.
Last week’s attack on central Jakarta which killed four civilians was relatively unsophisticated. But it brought home to Indonesia—and the region more broadly—the risks of Asians going to fight in the Middle East and then returning skilled and more radicalized. While Widodo, better known as Jokowi, has urged countries to “wage war” against ter-rorism, he has not moved to bolster laws to tackle the threat.
“All that is needed is political sup-port, but that is difficult in Indone-sia,” said Ansyaad Mbai, a former head of the country’s anti-terror agency. “At the highest level people are afraid of being accused of being anti-Islam.“
Revoking citizenshipON Friday Police General Badrodin Haiti said he wanted to be able to re-voke the citizenship of Indonesians fighting with IS abroad. National in-telligence agency chief Sutiyoso said laws were not sufficient to arrest and track extremists. He said Malaysian authorities can attach electronic tracking devices to suspects, while the US and France were able to strike a balance between human rights and the need for firm action.
“Those countries respect human rights and freedom,” he told report-ers. “But when national security is threatened by terrorism, they can prioritize the intelligence process.“
The police chief on Saturday called for antiterrorism laws to be strengthened to allow preventative detention. “We can detect a terrorist network but we can’t act before they
All that is needed is po-
litical support, but that is difficult in Indonesia.”
—Mbai, former head of Indonesia’s
antiterror agency
Net outflow of foreign funds that exited Vietnam’s stock market this month
Tourism-related investments attracted by Myanmar in 2015
have committed a crime,” he said. “That is the weakness of our laws.”
Economy, jobsREVISING the law requires getting it through parliament, a slow-moving body where the opposition has sig-nificant clout and which includes Islamic parties that could oppose giving police more powers.
Since taking office in October 2014, Jokowi has largely stuck to a campaign pledge to focus on every-day issues like the economy, health and jobs. The brazen gun and bomb attack less than 2 kilometers from his office could change that. Even so, when Rizal Ramli, coordinating minister for maritime affairs, was asked if there had been any talk at cabinet level on revising anti-terror laws or issuing an emergency regula-tion, he replied “not yet.”
If Jokowi gives greater powers to the army it could see it more in-volved in clamping down on those with radical views. It could also strengthen the military’s hand in the public sphere. There are already concerns Jokowi has allowed it a greater role in order to shore up his administration. Coordinating Security Minister Luhut Panjai-tan, a former army commander, is
MYANMAR is seeing good prospects in its tourism industry in 2016, with the
number of tourists visiting the coun-try expected to increase this year.
Tourist arrivals, as of the end of November 2015, reached more than 4.2 million. The Ministry of Hotels and Tourism estimates that the number will rise to 5 million by April 2016.
Myanmar attracted $2.64 bil-lion worth of foreign investment in 47 projects in the sector of hotels and tourism in 2015, up $1.5 bil-lion from 2011’s $1.14 billion in 36 projects.
Of the total foreign investment in the sector in 2015, Singapore accounted for $1.47 billion, the highest among all countries and regions, followed by Vietnam with $440 million.
The tourism sector development in Myanmar in 2016 depends on the progress of related investments in the previous year, as well as the global and Asean economy.
According to the ministry’s mas-ter plan (2013-2020), tourist arriv-als are estimated to hit 7.49 million in 2020.
Tourists from neighboring coun-tries frequently visit Myanmar on
Vietnamese stocks head for 20-mo low amid selling
one of Jokowi’s trusted advisers in the cabinet.
Under Suharto, the military had a broad internal security role and was implicated in human-rights abuses during crackdowns on separatists, Islamic activists and democracy ad-vocates. It was curtailed after the fall of Suharto, but still jostles for influence with the police, including in Central Sulawesi, a remote eastern province where a small band of mili-tants loyal to IS are based in jungle hideouts. The army has been push-ing to take over counterterrorism operations from the police.
Operational involvement“PRESIDENT Jokowi has stressed the need for the police and military to work together on terrorism pre-vention, but the TNI has long wanted more operational involvement,” the Institute for Policy Analysis of Con-flict said in a report in May. “Each of the three services within the TNI —army, navy and air force—has a highly trained CT detachment as part of its special forces unit, but they are rarely employed.”
Indonesia, where most people practice a moderate form of Islam, has struggled against a violent radi-cal fringe seeking the imposition of
Shariah law since independence in 1945. A group of militants, many of whom trained in al-Qaeda camps in Afghanistan, staged large-scale bombings against mostly Western targets in the 2000s, prompting a crackdown that severely weakened the movement.
‘Greater attention’LAST month Jokowi’s government rejected an appeal by Saudi Arabia to join its coalition against IS, saying it lacked details. A devout Muslim him-self, Jokowi has spoken out against extremism, but his rhetoric and ac-tion against drug smugglers, for ex-ample, has been more pronounced.
“Up until now, Jokowi has re-mained disengaged in defense and security matters relative to domes-tic issues such as boosting economic growth and improving infrastruc-ture,“ said Natalie Sambhi, an Indo-nesian defense analyst at the Aus-tralian Strategic Policy Institute. “Jokowi will be forced to pay greater attention to this issue.”
Money for Thursday’s attack was sent by an Indonesian militant, who was released from jail in 2012 and is now in Syria, Haiti said. One of the at-tackers had been convicted of attend-ing a militant camp and was released
from jail in Jakarta last year, Haiti added. Since the early 2000s, the In-donesian government has funded na-tionwide programs aimed at blunting the appeal of extremist propaganda and “deradicalizing” convicted ter-rorists in jail. There have been sev-eral cases of militants returning to violence after their release.
“We must raise our awareness because terrorism has yet to be de-stroyed,” Jokowi said in a tweet after the attack. ”Protect your family from the influence of terrorist ideology.”
As well as boosting laws to deal with returnees, Indonesia needs to tackle radicalism online to curb re-cruitment . The government shut 10 web sites and social-media accounts after the attack, Rudiantara, the communications minister, said in an interview on Friday.
“From a policy point of view, they need to act against IS by finding a legal way to arrest returnees, stop people from getting to Syria and, most important, stop extremist religious figures from recruiting,” said Paul Rowland, an independent Jakarta-based political consultant. “The public is going to want some kind of action and Jokowi has the opportunity to act now to curtail extremism.” Bloomberg News
VIETNAM’S stocks fell toward the lowest level in 20 months as energy shares tumbled with
oil and foreign selling accelerated be-fore a leadership reshuffle from later this month.
The benchmark VN Index slumped 4.6 percent to 518.16 at 1:30 p.m. local time, its fourth day of declines, poised for the lowest close since May 13, 2014. PetroVietnam Gas JSC and PetroViet-nam Drilling and Well Services JSC sank more than 5 percent, set for record lows. Vietnam starts the process of picking its new leaders this month, with the party congress starting on January 20.
The once-in-five years political tran-sition comes as the country finds itself balancing its Communist loyalty and economic dependence on China with increasing concern about that nation’s behavior over islands they both claim in the South China Sea. Foreign investors have sold a net $22.9 million of Vietnam-ese shares this month, data compiled by Bloomberg show. The stock index is the biggest decliner among developing-nation equities, which sank to a six-year low as Brent oil traded near $28 a bar-rel, sapping demand for riskier assets.
“There are election rumors that we have to watch closely these days, and that might affect market quite a bit,” said Attila Vajda, managing director at Singapore-based advisory firm Project Asia Research & Consulting Pte. The drop in oil prices is also weighing on the nation’s shares, he said.
The tension with China has seen Vietnam gravitate toward the US, with the warming of military ties and the country’s involvement in the US-led Trans-Pacific Partnership trade pact. The nation’s equity measure has tumbled 10 percent this year, dragging down valu-ations to the lowest level since August.
“Sentiment remains very weak and the drop in oil prices is dragging the market further, triggering concerns that margin calls will happen soon,” Dang Tran Hai Dang, deputy manager of research at VietinBank Securities JSC said in Hanoi. The foreign selling has also affected local investors’ sentiment, he said. Bloomberg News
IN this January 15 photo, Muslims perform prayers at a mosque in Jakarta, Indonesia. A day after attackers detonated bombs and engaged in gunbattles with the police in the central part of Indonesia’s capital, Jakarta tried to get itself back on track. AP
Myanmar sees good prospects for visitor arrivals, tourism investments in 2016
motorbikes, bicycles and boats un-der the arrangements by tour compa-nies in cooperation with the ministry.
Rising number of foreign tourists is seen, as river cruise ships arrive in the country in the tourism season, which used to start in the beginning of the year.
The cruise liner MS Seven Sea Voyage, which is carrying 699 visi-tors and 447 crew, will be arriving in Myanmar on a three-day visit until January 25. More cruise ships are also set to dock in Myanmar in January and February.
According to official statistics, Myanmar welcomed 25 luxury cruise ships carrying 26,000 visi-tors last year.
Moreover, foreign tourists are signing up for Chindwin river cruises, which offer views of Myanmar’s
natural landscape and encounters with ethnic minority communities and their cultures. The number of tourism companies increased to 1,922 from 1,670 in 2014. Of them, 1,822 are owned by locals.
Myanmar’s hotels are also sprout-ing across the nation to give adequate accommodation to the increasing number of tourists, according to the Myanmar Hoteliers Association.
Some 340 hotels are operating
across the nation in 2015, compared with 290 in 2014, according to U Tin Win, chairman of the Myanmar Ho-teliers Association.
Meanwhile, the government has established 17 hotel zones in
such areas as Nay Pyi Taw, Yangon, Mandalay and Bago regions.
Tourist arrival through Yan-gon International Airport totaled 759,181 in the first nine months of 2015, up 82,174 from 677,007 in the same period of last year. More than 800,000 tourists entered Myanmar by air and water, while more than 2.2 million tourists visited the country through border entrances. Tourist arrival is highest in the Yangon, Man-dalay, Inlay and Bagan hotel zones.
The number of tourist arrivals to Mandalay, the second-largest city of Myanmar, reached 306,432 in 2015, up 26 percent from 242,566 in 2014.
Mandalay, the last royal capital of Myanmar, has a population of just over 1.2 million, according to the lat-est census. The majority of foreign tourists came from China, Thailand, France, Germany and the US.
At present, eight domestic airlines and five international airlines are operating services in Mandalay and the plans are under way to expand the international flights and airline access to Mandalay.
Under the new system, there are 12 types of entry visa and three types of re-entry visa available for foreign travelers to facilitate their visit to Myanmar. PNA
A POLICE o�cer stands behind a police line in front of Shwedagon Pagoda, during a protest of Myanmar’s nationalist Buddhist monks and their supporters against a Thai court’s verdict sentencing two Myanmar migrant workers to death, in Yangon, Myanmar, on Sunday. AP
The WorldTuesday, January 19, 2016 | Editor: Lyn Resurreccion BusinessMirrorA6
China prepares for worstin Taiwan after Tsai victory
TAIWAN’S Democratic Progressive Party presidential candidate Tsai Ing-wen (center) raises her hand as she declares victory in the presidential election on Saturday in Taipei, Taiwan. AP/WALLY SANTANA
The result, in which Tsai ’s Democratic Progressive Party (DPP) also won its first legisla-tive majority, was fueled in part by skepticism over Taiwan’s rap-prochement with its former civil war foe during President Ma Ying-jeou’s eight-year tenure. While that policy put both China and the US at greater ease, Taiwanese voters anxious over dependence on their giant, Communist-run neighbor overwhelmingly elected a party that officially supports separating from the mainland.
Now, less than three months after Xi Jinping’s historic meet-ing with Ma in Singapore, Chi-na must revise its road map for eventual reunification with Tai-wan, which it considers a prov-ince. Its ability to reach some understanding with Tsai wil l determine whether both sides of the Taiwan Strait continue to grow together, or the relation-ship descends into economic es-trangement or even threats of attack. The mainland is Taiwan’s largest trading partner, buying 40 percent of its exports, even as the two remain military rivals.
“Cross-strait political relations are entering a new juncture,” said Xu Shiquan, a senior researcher at the government-run Chinese Acad-emy of Social Sciences in Beijing. “The only certainty is the uncer-tainty ahead, and we can’t see where it’s heading for now.”
One ChinaTHE Communist Party’s suspicion of Tsai dates back to her days as an adviser to the Kuomintang (KMT) administration of ex-President Lee Teng-hui, when she helped draft a policy redefining the cross- strait relationship as a “special state-to-state” one, a move seen in Beijing as secessionist.
Formally joining the DPP in 2004, she served as minister for mainland affairs under DPP Presi-dent Chen Shui-bian. He refused to accept the mainland’s precondi-tion for talks and agree that both sides belong to one China, an idea known as the “1992 consensus.”
Chen’s pursuit of independence led the Communist Party to pass in 2005 a law authorizing attack to prevent secession, a threat that still hangs over the island. Such spats pose a liability to the US, which is obligated to defend Tai-wan under a 1979 law.
Although Tsai has also not en-dorsed the so-called one-China principle, she won over moderate voters wary of provoking China by pledging to uphold the “status quo” and focus on economic issues. ‘No accidents’“I ALSO assure you, in the future when I handle cross-strait relations, I’ll actively communicate,” Tsai told supporters after her victory on Sat-urday. “I won’t provoke, and there won’t be any accidents.”
Shelley Rigger, a politics profes-sor at Davidson College who wrote Why Taiwan Matters: Small Island, Global Powerhouse, said the DPP knows it was elected to address do-mestic concerns first. Tsai wouldn’t risk angering Beijing and derail-ing her agenda with policies just to please the more independence-minded members of her party.
“Tsai Ing-wen would be really cautious about that,” Rigger said in Taipei. “Once you go off in that direction, there’s no turn-ing back. The die is cast for the next eight years.”
For the moment, it’s unclear how the Communist Party and the new leadership in Taipei will maintain communications. The Chinese government reaffirmed the 1992 consensus as the basis for any talks in a commentary on Sunday and has previously warned relations might collapse without it. Trade dealsOFFICIALS on the mainland will be watching Tsai for even small signs of departure from the poli-cies of Ma, who signed 23 cross-strait agreements on everything from allowing direct f lights to opening each other’s financial sectors to investment.
T he leadership w i l l be on alert for any efforts to empha-size Taiwanese—as opposed to Chinese—culture and identity
in the island ’s schools. Ma’s trade agreements give China a myriad of new options for put-ting economic pressure on Tai-wan that don’t involve military threats. They could reduce the more than 4 million mainland tourists that visit annually or withdraw from talks on reduc-ing trade barriers to agricultural and manufactured goods.
They could also resume efforts to lure away the last 22 states that still have diplomatic rela-tions with Taiwan. “A little bit of economic and trade suppression would probably inf lict enough pain on the island,” said Chang Ling- chen, a professor of political science at National Taiwan Uni-versity. “And a bit of squeezing here and there in the international space would also be very tangible.”
Bumpy relationsSTILL, China benefits from closer economic ties with Taiwan, which advance its ultimate goal of reuni-fication. The Communist Party must be careful not to appear too aggressive and alienate more Tai-wanese voters, particularly young people who mounted student pro-tests in 2014 against a services trade pact with the mainland.
Tsai won with the biggest mar-gin of victory since Taiwan’s first democratic presidential election two decades ago. The DPP also secured 68 seats in the 113-seat Legislative Yuan. “Relations are going to be more bumpy and per-haps tense, but Beijing’s interest is to make Taiwan more dependent, rather than less dependent, upon the mainland,” said Jean-Pierre Ca-bestan, a political science professor at Hong Kong Baptist University who specializes in cross-strait rela-tions. “So it will try to weaken and isolate Tsai, but not to cut all ties with Taiwan.” Bloomberg News
40%Taiwan’s exports that go to China
FACED with the biggest chal-lenge of her decade in power, Angela Merkel is poised for a
week that may determine the out-come of her quest to keep Germany open to refugees.
The German chancellor will run straight into the gathering storm over her policy on Monday, when she chairs a meeting in Berlin of the national executive of her Christian Democratic Union (CDU) amid open revolt within the party ranks.
She then heads to the Alps for mid-week talks with her rebellious Bavarian allies and ends the week hosting a summit with Turkish gov-ernment leaders, in whose hands she has placed much of the respon-sibility for stemming the influx of migrants to Europe.
“We want Plan A to work,” Ger-man Deputy Finance Minister Jens Spahn said in a Bloomberg Television interview on Sunday. “We need a European solution to keep Europe together.” Merkel ’s week of refugee politicking shows heightened urgency after mass sexual assaults on New Year’s Eve increased pressure on her to impose border restrictions, a de-mand championed lawmakers in her party bloc who plan to hand her a letter of protest on Monday.
Merkel, backed by Finance Min-ister Wolfgang Schaeuble, is seek-ing a deal within the European Union (EU) to help Turkey care for its more than 2 million Syrian ref-ugees and resettle asylum-seekers more evenly in the EU.
As Merkel’s popularity fell to its
lowest point since October 2011 in a ZDF television poll last week and the organized protest by back-benchers took shape, Schaeuble, a key ally in her CDU and Germany’s longest-serving lawmaker, rose to her defense.
“I support what the chancellor says with total conviction,” Schaeu-ble, Germany’s most popular poli-tician, told Sueddeutsche Zeitung in an interview published on Friday. Merkel is working “to the point of exhaustion” to solve the refugee cri-sis and “things are moving too slowly in Europe,” he told the newspaper.
The letter by a group of law-makers in Merkel’s parliamentary bloc will urge her to bar refugees arriving from other EU countries, according to a lawmaker involved in the drafting, who asked not to identified because the letter isn’t public yet. Spahn, who’s also a law-maker, disagreed with the form of protest.
“People are discussing what to do, what is the situation after Cologne, with even more emotions, and we have the same discussion within the party,” he said. “We don’t need a let-ter to say what we think.”
Merkel plans to travel to Ba-varia on Wednesday for the sec-ond time in two weeks for talks with the state’s ruling Christian Social Union, which has opposed her refugee stance for months and is threatening to file a constitu-tional complaint against it. The southern state is the main entry point for asylum seekers arriving in Germany. AP
Merkel’s refugee showdown nears amid party revolt over borders
WH I L E C h i n e s e s t o c k s h a v e whipsawed investors, growth in the world’s second-largest
economy is still forecast to come in just under the government’s 7-percent target. The nation’s fourth-quarter and full-year GDP report will be released on Tuesday at 10 a.m. in Beijing, or 9 p.m. Monday on Wall Street. Economic growth for the quarter and year were both 6.9 percent, according to a Bloomberg survey of economists as of late on Friday.
The stakes are high, and not just for policy-makers’ credibility: Data showing a sharper slowdown may spur more fiscal and monetary stimulus, while a stronger reading may provide a tonic for jittery global markets concerned about China’s outlook. Pol ic y-makers have s ignaled they’ll allow some slowness as they tackle painful tasks like reducing excess capacity, but nothing that could threaten President Xi Jinping’s goal of at least 6.5-percent growth through 2020.
Aside from the headline growth rates, a closer examination of the report will help gauge the health of various facets of the economy.
Price pressureBY calculating the difference between n o m i n a l g r o w t h ( n o t a d j u s t e d f o r inflation or deflation), and real growth (which is adjusted), we’ll be able to see the latest on the GDP deflator, which was negative in the first nine months of last year. Deepening deflation, stemming from a record stretch of more than three years of producer-price declines, would be a negative sign for an economy grappling with slowing profits and rising debts—both of which are also priced in nominal terms.
Income, jobsRAPID income growth over the last decade has made Chinese consumers an increasingly powerful force, snapping up Apple iPhones, Tiffany diamonds and Toyota sedans. Fresh evidence of that ascent will be revealed this week in a section of the GDP report on per capita disposable income.
That number still has room to rise. The national average disposable income per person was 20,167 yuan ($3,272) in 2014, less than a tenth the US level. The level for urban residents was 28,844 yuan, triple the level from a decade earlier. Fresh readings should show further improvements, underpinning one of the economy’s strongest pillars last year—consumption. Wang Baoan, the new head of the statistics bureau, may give an
update on the health of the labor market at a briefing after the GDP release. Survey-based unemployment, a number Premier Li Keqiang has said he monitors, was at about 5.2 percent in September.
The nation added about 13 million new jobs last year, according to its top economic-planning body, topping the target of 10 million, thanks to a booming services sector.The government also wil l publish a labor market repor t around the GDP release date. That wil l show which sec tors are hir ing, and the level of job openings across various regions.
Growth driversON Wednesday the National Bureau of Statistics will publish its breakdown of total economic output, offering a more granular look into which parts of the economy are leading and lagging. Financial ser vices grew 16 percent in the third quarter from a year earlier, a pace that will be hard to match in the fourth quarter because of a higher base year comparison given the market boom took off in late 2014. NBS will also detail the value-added of agriculture, industries, transportation, accommodation, property and other key industries.
Housing investmentT H E golden age is over for proper ty de -velopers, with the real estate market in a third year of downturn. Growth in fixed- asset investment in real estate slowed to 2.8 percent in the first 11 months from a year earlier, compared to a 20 percent jump in the same period two years ear-lier. That investment gauge will turn into negative territory this year, according to JPMorgan Chase & Co. and Nomura Hold-ings Inc. analysts. By contrast, researchers at China’s central bank are more optimistic, forecasting a recovery on brighter sales prospects and price gains in bigger cities, according to a working paper. Consumer cashR E TA I L sales were robust throughout the year, despite the stock market turmoil and lackluster investment. Online shoppers opened their electronic wallets November 11 to spend a record $14.3 bill ion in 24 hours during the Singles Day shopping holiday created by Alibaba Group Holding Ltd.December and full-year retail sales figures will be released Tuesday along with GDP. Tallies will include online sales, which soared 33 percent in the first 11 months. Bloomberg News
Beyond the headlines: Five things to watch in China’s GDP report
TSAI INGWEN’S landslide election win in Taiwan revives a long-dormant source of tension
in Asia, as China waits to see how far the new president will push her party’s goal of independence.
The WorldBusinessMirror [email protected] | Tuesday, January 19, 2016
WHILE QUESTIONS LOOM ABOUT ROAD AHEAD
Obama: Iran deals vindicate diplomacy
“This is a good day,” Obama said on Sunday. “Because once again we’re seeing what’s possible with strong American diplomacy.”
Obama spoke after a plane car-rying a group of Iranian-Americans, who had been held as prisoners in Iran, left the Islamic Republic, and a day after the implementation of an agreement to curb Iran’s nuclear weapons development.
The implementation of the agreement and the release of the prisoners is a milestone for Obama, who has argued that his approach of hard-nosed diplomacy backed by onerous sanctions succeeded in keeping the US out of a military conflict in the Middle East. The nuclear deal capped more than two years of wrangling between Iran and the US, China, Russia, Germany, France and Britain. Over multiple presidential administra-tions and through the Cold War, “the United States has never been afraid to pursue diplomacy with our adversaries,” Obama said.
Gulf remains in relationsAMID celebration of the milestone nuclear-deal and the depature from Iran of three freed Americans, the Obama administration offered a reminder on Sunday of the gulf that remains in the countries’ relations.
The US placed new sanctions targeting 11 people or companies that work to advance Iran’s ballis-tic missile system, and President Obama promised to “remain vigi-lant.” That announcement came almost as an aside in an otherwise upbeat message but illustrated the continued strains in what is be-ing hailed as a new relationship between enemies Iran and the US.
Addressing their respective na-tions, Obama and his Iranian coun-terpart, Hassan Rouhani, praised the nuclear deal as a victory for tough diplomacy between two gov-ernments that just a short time ago were not on speaking terms.
Prisoner swapOBAMA said the deal, fully imple-mented on Saturday, makes the world safer, allows Iran to join the world by lifting key sanctions and is already providing sidebar dividends: The release of five Americans who were being held in Iranian jails and were “final-
ly coming home.” Three of them touched US territory on Sunday, at an American military base at Ramstein, Germany. The Swiss jet carrying Washington Post reporter Jason Rezaian and the others land-ed on Sunday evening at the base, where the freed men will undergo medical checks.
Along with Rezaian, the other two were US Marine veteran Amir Hekmati and Christian pastor Saeed Abedini. Also on board were Rezaian’s Iranian wife and his mother; locating them in Tehran on Saturday delayed the departure of the flight.
A fourth Iranian-American, Nosratollah Khosravi-Roodsari, about whom little is known, chose to stay in Iran, US officials said, adding that it was his right to de-cide where to go. The fifth, student Matthew Trevithick, who was in Iran studying Farsi, left earlier.
With the exception of Trevith-ick, the prisoners were released in exchange of seven Iranians who were jailed or facing trial in the US. They were charged with vio-lating sanctions by attempting to illegally export prohibited items and will be granted clemency by Obama. They were on a much lon-ger list the Iranians supplied but that was whittled down to include only those who hadn’t committed violent or terrorism-related crimes, US officials said.
Iran’s ‘golden page’OBAMA said the nuclear deal, under which Iran has dismantled much of its nuclear arms capabili-ties and been rewarded by the eas-ing of significant economic sanc-tions, serves as a reminder “of what we can achieve when we lead with
strength and wisdom.” And he told the Iranian people that they will be able to emerge from dark days of isolation. Iran will receive tens of billions of dollars in frozen as-sets as well as access to the inter-national banking system and world markets for its oil and gas.
“We’ve now closed off every single path Iran had to build-ing a [nuclear] bomb,” Obama said, speaking from the White House. “We’ve achieved this his-toric progress through diplomacy, without resorting to another war in the Middle East.”
In Tehran, before parliament, Rouhani lauded a “golden page” in the Islamic Republic’s history that will be the beginning of economic recovery thanks to the injection of cash and trade. “While we always remain ready to defend Iran, we bear the message of peace, stability and security for our region and the world,” he later tweeted.
Iranian officials are hopeful that the lifting of sanctions will help revive the nation’s economy, crippled by the sanctions in recent years, but the low price of oil means its immediate income will be lower than needed or expected.
Obama also announced the reso-lution of a long-standing claim Iran had brought in the Iran-US Claims Tribunal in The Hague, the inter-national court through which such demands were pursued.
Dating to shortly after the 1979 Islamic Revolution, Iran said it was owed $400 million for military
equipment the deposed govern-ment was buying. In the resolution, the US paid the $400 million plus $1.3 billion in interest, which was much less than what the Iranians had sought, Obama said.
Within the framework of the nuclear negotiations, a less hostile relationship developed between the US and Iran following decades of acrimony, especially through the personal contacts of US Secre-tary of State John F. Kerry and his Iranian counterpart, Javad Zarif. Many hope that can be translated into cooperation on other persistent conflicts in the region, such as the civil war in Syria.
American officials are also hope-ful that the success of the nuclear deal will strengthen the hands of Rouhani and other likeminded moderate Iranians. With Iran, the tone of its rhetoric “very much changed when Rouhani was elect-ed,” an administration official said. “He had a mandate to engage the West on the nuclear issues.”
Yet, it is clear that change comes slowly in Iran and discord between the two countries remains deep.
New sanctionsON Sunday, hours after the nuclear deal, the Obama administration slapped new sanctions on Iran’s bal-listic missile program in connection with alleged violations of United Nations resolutions last year. The sanctions had been prepared weeks ago but held up until the prisoners were freed. The sanctions target “11
entities and individuals,” includ-ing a network based in the Middle East and China and another with suspected links to North Korea, as well as five Iranians who US officials said had worked to secure ballistic weapon components for Iran.
“Iran’s ballistic missile program poses a significant threat to region-al and global security, and it will continue to be subject to interna-tional sanctions,” Adam J. Szubin, treasury’s undersecretary for ter-rorism and financial intelligence, said in a statement on Sunday.
The sanctions include a freeze of any assets that these entities and individuals have in the US financial system, as well as prohibitions on doing business with them.
The sanctions are separate from the sanctions against the nuclear program that were lifted this weekend. Iran launched bal-listic missiles on two occasions last year in violation of the UN restrictions; Iran says it has a right to use the weapons.
Other US sanctions that remain in place on Iran include those re-lated to activities considered by Washington to be terrorism and violations of human rights. Obama and other US officials insist they can revive other sanctions at any point, if Iran is found to be in vio-lation of nuclear restrictions or any other sanctionable activities.
In swapping the prisoners, the Obama administration has come under criticism among Republi-cans and others for appearing to
exchange innocents for convicted criminals. But administration offi-cials on Sunday defended the swap, saying it was a one-time, unusual opportunity that they saw arise on the margins of the nuclear talks.
At the start of the discussions, which were usually held in Swit-zerland, Iran asked the US to re-lease many more Iranians than the seven who were ultimately freed from US custody. Over 14 months of talks, US officials said, they were able to narrow the group to those who’d commit-ted or were accused of nonviolent sanctions violations.
“It became possible to see a way to get the American citizens home,” said one senior administration of-ficial, who would not be named dis-cussing the private talks.
Officials acknowledged it was a calculated risk.
“Do you want to leave these Americans in prison at great risk to themselves and great hardships to their families? This was our op-portunity to bring them home,” he said. “We also did not have to release any Iranians involved in terrorism or violent crimes.”
The officials said the search will continue for Robert Levinson, a re-tired Federal Bureau of Investiga-tion agent working on an unauthor-ized Central Intelligence Agency mission in Iran, who disappeared eight years ago. He has not been found, and Kerry has said the US has no idea where he is. Bloomberg News/TNS and Los Angeles Times/TNS
WASHINGTON—A new wave of oil from Iran will flow into a global market
awash in oil where prices are plung-ing to depths not seen in a dozen years. With a historic nuclear deal between Iran, the United States and five other world powers set into place this weekend, a European oil embargo on the world’s seventh-largest oil producer will end.
The impact may be felt widely when crude begins trading in Asian markets on Monday, but the return of Iran to global energy markets created tremors even before the first trade was made. Saudi Ara-bia’s stock market plunged more than 5 percent on Sunday. Saudi Arabia is the biggest oil producer within Organization of Petroleum
Exporting Countries (Opec), the oil cartel with waning influence to which Iran also belongs.
Saturday was dubbed Implemen-tation Day, when Iran was freed from international sanctions after being deemed as having dismantled most of its nuclear program under the deal established last summer.
“Implementation Day for the nuclear agreement means a new oil day for Iran,” Daniel Yergin, vice chairman of research firm IHS and author of a Pulitzer Prize-winning book on the history of oil, said on Sunday. The oil market has anticipated the unchained tide of Iranian oil for months, and some of that may be reflected in new lows for oil prices in the past week. US crude oil prices have trended
down for a year and a half, and have fallen almost 40 percent in just the past three months. On Friday, the price slid 6 percent to $29.42 a barrel. That compares with a high of over $100 a barrel in the summer of 2014, and close to $150 per barrel before the US recession. There are predictions of barrels going for $20 soon.
Falling crude prices have led to lower prices for gasoline, die-sel, jet fuel and heating oil. This has helped boost consumer spirits and encourage spending, but may also have slowed the overall recov-ery of the US economy last year as major energy companies slash investments and jobs. The aston-ishing fall of oil has created jitters globally as economic growth for a
major consumer, China, ebbs. That has rippled to US stock markets as well, over apprehension that the economic contagion will spread.
For Iranian oil, a big question is how much and how fast. Already, some 38 million barrels of oil are in Iran’s floating reserves, ready to enter the market, according to the International Energy Agency (IEA). Iran has signaled it aims to put as much as 1 million to 1.5 million barrels daily into the mar-ket. But the IEA estimates that 400,000 to 500,000 barrels a day is more likely; some experts see 300,000 or so barrels coming in during the next six months.
In any amount, “it’s coming at a time when the market is still over-supplied,” said Larry Goldstein,
director of the Energy Policy Research Foundation, who pre-dicted a decline in oil in 2014.
That could mean even more acute pressure on US oil drilling companies to cut back on new projects and jobs. It’s hard to know precisely what shape Iran’s oil fields are in. The IEA estimates that Iran’s crude oil production capacity at 3.6 million barrels a day, which is 800,000 more than current levels produced.
“We will try to maximize our crude export capacity to Europe and restore 42 percent to 43 percent share in the European market before the sanctions were imposed,” Mohsen Qamsari, di-rector of international affairs at Iran’s national oil company,
was quoted as saying in Iran’s of-ficial news agency. The fight for control of global oil markets in Opec and outside of the cartel is entering a new phase, according to Yergin. Nothing is certain, how-ever, as a new global landscape for energy emerges. Among the biggest wild cards right now is Opec member Venezuela, which “is about to fall apart,” said en-ergy economist Philip Verleger.
New economic data from the country’s central bank shows an economy in shambles and annual-ized inflation surging into triple digits. Experts say Venezuela is dangerously close to just breaking even on the oil it produces, which accounts for 95 percent of export earnings. AP
With wave of Iranian oil imminent, a shudder in Saudi Arabia
11people or companies in new US sanctions
WASHINGTON—President Barack Obama said that while the nuclear agreement
with Iran doesn’t resolve all conflicts between the United States and the Islamic Republic, it is a vindication of his emphasis on using tough diplomacy rather than military confrontation.
IRANIAN President Hassan Rouhani (left) presents a draft of the country’s new budget and sixth development plan to the Parliament Speaker Ali Larijani in an open session of parliament in Tehran, Iran, on Sunday. The end of nuclear-related sanctions and the �urry of diplomacy that led to the release of Americans held by Iran suggests a new era could be dawning in Tehran. AP/VAHID SALEMI
The WorldBusinessMirrorA8 Editor: Lyn Resurreccion • [email protected], January 19, 2016
GAZIANTEP, Turkey—Mo-hammed Saad, a Syrian ac-tivist, was imprisoned by the
Islamic State (IS) group, hung up by his arms and beaten regularly. en one day, his jailors quickly pulled him and other prisoners down and hid them in a bathroom.
� e reason? A senior Muslim cler-ic was visiting to inspect the facility. � e cleric had told the � ghters run-ning the prison that they shouldn’t torture prisoners and that anyone held without charge must be released within 30 days, Saad told the Associ-ated Press (AP). Once the coast was clear, the prisoners were returned to their torment.
“It’s a criminal gang pretending to be a state,” Saad said, speaking in Turkey, where he � ed to last Oc-tober. “All this talk about applying Shariah and Islamic values is just propaganda, Daesh is about tor-ture and killing,” he said, using the Arabic acronym for IS.
Syrians who have recently es-caped the IS group’s rule say public disillusionment is growing as IS has failed to live up to its promises to in-stall a utopian “Islamic” rule of jus-tice, equality and good governance.
Instead, the group has come to resemble the dictatorial rule of Syr-ian President Bashar al-Assad that many Syrians had sought to shed, with a reliance on informers who have silenced a fearful populace. Rather than equality, society has seen the rise of a new elite class—the jihadi � ghters—who enjoy spe-cial perks and favor in the courts, looking down on “the commoners” and even ignoring the rulings of their own clerics.
Despite the atrocities that made it notorious, the IS group had raised hopes among some fellow Sunnis when it overran their territories across parts of Syria and Iraq and declared a “caliphate” in the summer of 2014.
It presented itself as a contrast to Assad’s rule, bringing justice through its extreme interpretation of Shariah and providing services to residents, including loans to farm-ers, water and electricity, and alms to the poor. Its propaganda machine promoting the dream of an Islamic caliphate helped attract jihadis from around the world.
In Istanbul and several Turkish cities near the Syrian border, the AP spoke to more than a dozen Syrians who � ed from IS-controlled terri-tory in recent months. Most spoke on condition that they be identi� ed only by their � rst names or by the nicknames they use in their politi-
cal activism, for fear of IS reprisals against themselves or family.
“Daesh justice has been erratic,” said Nayef, who hails from IS-held eastern Syrian town of al-Shadadi and escaped to Turkey last Novem-ber with his family, largely because of Russian airstrikes.
“� ey started o� good and then, gradually, things got worse.” He insisted that his last name not be printed, fearing for his safety.
� e group has recruited inform-ers in the towns and cities it con-trols to watch out for any sign of opposition.
“Like under the [Assad] regime, we were also afraid to talk against Daesh to anyone we don’t fully trust,” said Fatimah, a 33-year-old whose hometown of Palmyra was taken over by IS early last year. She � ed to Turkey last November with her husband and � ve children to es-cape Russian and Syrian air strikes.
IS has also become less able to provide public services, in large part because military reversals appear to have put strains on its � nances.
US and Russian air strikes have heavily hit its oil infrastructure—a major source of funds. Over the past year, the group has lost 30 percent of the territory it once held in Iraq and Syria, according to the US-led anti-IS coalition.
Many of those interviewed by the AP said there are lengthier cuto� s of water and electricity in their towns and cities and prices for oil and gas have risen.
Abu Salem, an activist from the eastern city of Deir el-Zour, said pub-lic acceptance of IS rule is eroding.
“It has made an enemy of almost everyone,” he told the AP in the
Turkish city of Reyhanli on the Syr-ian border.
One sign of the distance between the claims and realities is a 12-page manifesto by IS detailing its judicial system. � e document, a copy of which was obtained by the AP, heav-ily emphasizes justice and tolerance.
For example, it sets out the duties of the Hisba, the “religious police” who ensure people adhere to the group’s dress codes, strict separation of genders and other rules.
A Hisba member “must be gentle and pleasant toward those he orders or reprimands,” it says. “He must be � exible and good mannered so that his in� uence is greater and the re-sponse [he gets] is stronger.”
Yet, the escaped Syrians all com-plained of the brutal extremes that the Hisba resorts to. One woman who lived in Raqqa said that if a woman is considered to have vio-lated the dress codes, the militants � og her husband, since he is seen as responsible for her. When her neigh-bor put out the garbage without be-ing properly covered, she said, the woman’s husband was whipped.
Abu Manaf, a 44-year-old from Deir el-Zour, said some clerics chal-lenged the group’s enforcers over their wanton use of strict Shariah punishments like beheadings, stoning to death, � ogging and cut-ting o� limbs.
More moderate clerics in IS ar-gued that such punishments can only be implemented under speci� c conditions. � ey also complained about the jihadis’ custom of display-ing bodies of the beheaded in public as an example to others, violating Islamic tenets requiring the swift burial of the dead.
“Many of those moderate clerics disappear, are killed or jailed for crimes they did not commit,” said Abu Manaf, who left Deir el-Zour last November, then stayed in the IS group’s de facto capital, Raqqa, for three weeks before he reached Turkey.
Saad’s account of his imprison-ment in his home city of Deir el-Zour re� ected the tensions between the � ghters and some clerics.
He was arrested because of his media activism, reporting on the anti-Assad opposition. IS suspected him of belonging to the rebel Free Syrian Army, which is � ghting the extremists. � e day the cleric came to inspect the prison—set up in a former police station—he heard the cleric asking the guards if the pris-oners were getting enough food and water, and whether they were being beaten, Saad said.
On another occasion, a cleric and a judge visited and spoke to the pris-oners in their cells. Saad said they told him to write on a piece of paper
his name, why he’d been jailed and whether he had been tortured or made to confess under duress. He wrote that he had not been beaten, because he knew the guards would punish him if he said he had been, Saad said.
After � ve months in custody, Saad said he secured his release by agreeing to do media work for IS. For three months, he helped put to-gether videos and other propaganda before escaping to Turkey.
� e Syrians interviewed in Tur-key said that in IS courts the judges often show a bias toward IS op-eratives in any legal dispute with the general public. Judges justify the bias by pointing to Quranic verses or sayings of the prophet Muhammad, including “God pre-fers those who � ght in jihad over those who sit.” Often, IS members refer to the general population by the dismissive term “al-awam,” Ara-bic for “the commoners.”
Hossam, who owned a wom-en’s clothes shop in Raqqa, said IS members receive perks that sharply set them apart from ev-eryone else. In many cases, young men join the group to escape pov-erty or protect themselves from IS excesses, he and others said. He insisted that his last name not be printed, fearing for his safety.
“� ose who join Daesh receive a
step up in the social ladder,” he told the AP in Istanbul. “Daesh men drive luxury cars and eat at the best restaurants and whoever has a friend or a relative with Daesh has a better life.”
One perk that IS members avail themselves of is the chance to marry local women. Several of the Syrians interviewed by the AP said families with daughters often came under pressure to marry them o� to � ghters, which has led many to smuggle daughters to Turkey.
Khatar, a 26-year-old who spoke in Lesbos, Greece, making her way to Western Europe, said she has two younger sisters back in Raqqa, and jihadis “have been knock-ing on our doors at least once a month to ask for their hands in marriage.” Her father lies to them and tells them he doesn’t have unmarried daughters, “but they keep coming back.”
But some take the opportunity to marry an IS member because the bene� ts lift the whole family out of the “al-awam” class.
Khatar said a 17-year-old daugh-ter of one of her neighbors married a Saudi jihadi. When Khatar went to congratulate her, she found her loaded with expensive clothes and jewelry as a dowry. “She seemed very happy with her new, elevated social status,” Khatar said. AP
IS double standards sow growing disillusion
A MEMBER of the Islamic State group’s vice police known as “Hisba” reads a verdict handed down by an Islamic court in Raqqa, Syria, sentencing many they accused of adultery to lashing. A Hisba member “must be gentle and pleasant toward those he orders or reprimands,” says an IS document obtained by the Associated Press. Yet, escaped Syrians complained of the cruelty of the Hisba. MILITANT WEBSITE VIA AP
CHARLESTON, South Caroli-na—Democratic presidential candidates Hillary Clinton
and Bernie Sanders tangled repeat-edly in Sunday night’s presidential debate over who’s tougher on gun control and Wall Street and how to steer the future of health care in America. It was the last Democratic matchup before primary voting be-gins next month and both sides were eager to rumble as polls showed the race tightening in the leado� states of Iowa and New Hampshire.
Clinton rapped Sanders, the Ver-mont senator, for voting repeatedly with the powerful gun lobby, and then welcomed his weekend rever-sal of position to support legislation that would deny gun manufacturers legal immunity.
Sanders, in turn, said Clinton’s assertion that he kowtowed to the gun lobby was “very disingenuous” and pointed to his lifetime rating of a D minus from the National Ri� e Association.
On health care, Sanders released his plan for a government-run sin-gle-payer plan just hours before the
debate and used his opening state-ment to call for health care “for every man, woman and child as a right.”
Clinton, by contrast, urged less sweeping action to build on Presi-dent Barack Obama’s health-care plan by reducing out-of-pocket costs and control spending on prescription drugs. She suggested Sanders’s health-care plan would impose a heavier tax burden on the middle class.
� e two tangled over � nancial policy, too, with Sanders suggest-ing Clinton won’t be tough enough on Wall Street given the big con-tributions and speaking fees she’s accepted. Clinton, in turn, faulted Sanders’ past votes to deregulate � -nancial markets and ease up on fed-eral oversight.
Clinton worked aggressively to as-sociate herself with President Obama, claiming credit for her role in the run-up to the Iran nuclear deal as well as praising the health-care law.
Turning to national security, both Sanders and Clinton voiced strong support for Obama’s diplomatic overtures to Iran and opposition to sending US ground troops into Syria.
Clinton defended her outreach to Russia early in her term as secretary of state, but hesitated when asked to describe her relationship with Vladi-mir Putin, whose return to the Rus-sian presidency heralded the wors-ening of US-Russian relations.
“My relationship with him—it’s interesting,” Clinton said to laughs in the debate hall. “It’s one, I think, of respect.” But she added it was criti-cal to constantly stand up to Putin, describing him as a bully who “will take as much as he possibly can.”
Clinton also shed some light on what role her husband, former Presi-dent Bill Clinton, would play in her administration. Kitchen-table ad-viser, perhaps?
“It’ll start at the kitchen table—we’ll see where it goes from there,” she said with a laugh.
Sanders was asked about his pre-vious criticism of Bill Clinton’s past sexual behavior. He called the for-mer president’s behavior “deplor-able” but said he wants to focus on is-sues “not Bill Clinton’s personal life.” Clinton maintained a tight smile throughout that exchange, and nod-
ded as Sanders said the focus should be on issues.
� e debate over gun control—an ongoing area of con� ict between Clinton and Sanders—took on spe-cial import given the setting: � e de-bate took plan just blocks from the Emanuel African Methodist Episco-pal Church where nine parishioners were killed during a Bible study last summer. Gun control has emerged as a central theme in the race, with Clinton citing the issue as one of the major di� erences between the candidates.
� e third participant in the de-bate, former Maryland Gov. Martin O’Malley, tried persistently to insert himself into the conversation. He focused on his record as Maryland’s governor and accused both Clinton and Sanders of being inconsistent on gun control.
Both Clinton and Sanders are competing for black voters in South Carolina, which hosts the fourth pri-mary contest.
� e debate was sponsored by NBC, YouTube and the Congressio-nal Black Caucus Institute. AP
Clinton, Sanders clash on guns, health care PARIS—A man died in a French hos-
pital on Sunday after taking part in an experimental drug trial for a pain-
killer, and � ve other participants remain hospitalized after one of France’s most troubling medical incidents.
French prosecutors have launched a manslaughter investigation into the un-usual case, which shined a spotlight on the practice of testing drugs on paid, healthy human volunteers. Scores of oth-ers were also given the drug.
The Portuguese pharmaceutical com-pany testing the drug, Bial, said in a state-ment that it’s working with health authori-ties to determine what caused “this tragic and unfortunate situation.”
The Rennes University Hospital in west-ern France announced the death in a state-ment, but didn’t identify the patient, who had already been in a state of brain death.
He was among six male volunteers between 28 and 49 hospitalized last week after volunteering to take the drug. French health authorities have said three of the hospitalized volunteers face pos-sible brain damage.
The Paris prosecutor’s o� ce said the in-vestigation was expanded after the death to include potential manslaughter charges.
The trial, which began on January 7,
involved 90 healthy volunteers who were given the experimental drug in varying doses at di� erent times.
The hospital said it has contacted the 84 other volunteers exposed to the new painkiller. Ten of those volunteers un-derwent medical exams on Saturday, but the hospital found no anomalies, the statement says.
It said another � ve will have medical exams closer to their homes, but didn’t say whether the others are being moni-tored or tested. The drug was given orally to healthy volunteers as part of a Phase 1 trial by Biotrial, a drug evaluation company based in Rennes, on behalf of Bial.
Health Minister Marisol Touraine said that in addition to treating pain, the drug was intended to ease mood and anxiety troubles, as well as motor problems linked to neurodegenerative illnesses, by acting on the endocannabinoid system.
In this system, natural brain com-pounds act on speci� c receptors to exert their e� ects. Touraine said the drug was not based on marijuana or cannabis, as some reported.
Bial said clinical trials started last June fol-lowing toxicology tests and that 108 healthy people had already taken part in trials with no moderate or serious reactions. AP
Man dies in French drug trial
Territory IS once held in Iraq and Syria was lost to air strikes
30%
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The [email protected] Tuesday, January 19, 2016
� e panel’s report on humanitari-an � nancing, launched on Sunday by UN Secretary-General Ban Ki-moon, says the world is spending around $25 billion to provide life-saving assistance to 125 million people devastated by wars and natural di-sasters—more than 12 times the $2 billion that was spent in 2000.
� e nine-member panel calcu-lated that an additional $15 billion is needed annually to reduce su� er-ing and save lives. It warned that if current trends continue, the cost of humanitarian assistance will rise to $50 billion by 2030.
“� is is an age of mega-crises,” Ban said at the launch event, which was held at a desert site in Dubai that serves as a logistical hub for UN emergency humanitarian supplies and international relief e� orts.
� e 31-page report said that de-spite $25 billion being spent last year to provide life-saving assistance to people around the world, 1.6 mil-lion Syrian refugees had their food rations cut and 750,000 Syrian refu-
gees could not attend school.“While record sums are being
given to the noble cause of humani-tarian action, generosity has never been so insu� cient. We cannot go on like this,” Ban said, adding that humanitarian assistance is now the UN’s costliest activity, surpass-ing peacekeeping missions.
� e report focuses on three so-lutions for how to reform humani-tarian aid: mobilizing additional funds, particularly from the pri-vate sector; shrinking the need for aid through prevention and quick-er resolution of problems, and im-proving the e� ciency of assistance to re� ect the needs of people rather than the needs of aid organiza-tions.
It calls for donors and aid orga-nizations to come together in “a Grand Bargain” in which donors provide more cash, long term, with fewer strings, and aid organizations are more transparent so that every-one can “follow the money.”
� e report says that today’s mas-
sive instability and its capacity to cross borders, demonstrated by the � ight of people from Syria and other con� ict areas to Europe, makes hu-manitarian aid a global public good.
“What we ought to do is morally right, but it is also in our own self-interest because trouble in the world travels, and you never know when it will come and knock at your door,” panel cochairman Kristalina Geor-gieva, the European Commission vice president for budget and human resources, said in Dubai.
� e report recommends that at the � rst UN humanitarian summit, to be held in Istanbul in May, gov-ernments voluntarily sign on to the concept of a “solidarity levy” to cre-ate a steady � ow of aid.
� e report gives the example of a small levy on airline tickets, initially proposed by France, which raised €1.6 billion between 2006 and 2011 from just 10 participating coun-tries—Georgieva estimated this at $2.3 billion—to help fund diagnosis and treatment for HIV/AIDS, ma-laria and tuberculosis in low-income countries.
Georgieva said in a video brie� ng from Brussels before the report’s re-lease that the panel couldn’t agree on the speci� cs of a levy because some members are against taxation. But she said she is “more optimistic on a voluntary levy, especially combined with social responsibility.”
She said the panel talked about a small tax on “high-volume transac-tion businesses” like Uber, concerts, entertainment, movies and sports and has been talking to some “poten-tial players” including Fédération In-ternationale de Football Association, the governing body of world football.
She said people probably wouldn’t feel a 5-cent or 10-cent addition to a ticket or a ride, but the money gener-ated could have a major humanitar-ian impact.
� e report also calls for govern-ments with greater wealth to pro-vide more aid; for the humanitar-ian community to “harness the
power of business to deliver its key skills and capabilities,” including by supporting the delivery of aid and creating jobs, and for Muslim countries to use “Islamic social � -nance” to help meet humanitarian needs. � e report said that 31 out of 33 active con� icts today occur in Muslim-majority countries.
� e report noted that through zakat, the annual charitable dona-tion that is religiously required as a basic tenet of the Islamic faith, Muslims worldwide raised be-tween $232 billion and $560 bil-lion in 2015. However, the report said there is no coordination mech-anism or independent body to help channel these funds e� ectively at the global level.
To improve aid delivery, the panel calls for an end to competi-tion between aid organizations and between humanitarian and develop-ment agencies.
To shrink the need for aid, the panel calls for world leaders to commit to preventing and resolv-ing con� icts and to increasing in-vestments in reducing the risk of natural disasters.
“Unfortunately, it is easier to de-liver humanitarian assistance than it is to invest in political solutions,” the report said. AP
UN: $40B needed to aid people in war, disastersDUBAI, United Arab Emir-
ates—An estimated $40 bil-lion is needed annually to
help the rapidly growing number of people needing humanitarian aid as a result of confl icts and natural di-sasters—and one possibility to help fi ll the $15-billion funding gap is a small voluntary tax on tickets for soccer games and other sports, con-certs and entertainment events, air-line travel, and gasoline, a UN-ap-pointed panel said.
Being spent worldwide for 125 million people victims of wars and natural disasters
$25BROME—Pope Francis denounced all
religious-inspired violence during a visit to Rome’s main synagogue
on Sunday, joining the oldest Jewish community in the diaspora in a sign of in-terfaith friendship at a time of Islamic ex-tremist attacks around the globe.
During a visit marked by tight secu-rity and historic continuity, Francis also rejected all forms of anti-Semitism and called for “maximum vigilance” and early intervention to prevent another Holocaust.
Francis joined a standing ovation when Holocaust survivors, some wearing striped scarves reminiscent of their camp uniforms, were singled out for applause at the start of the ceremony. And he elicit-ed an ovation of his own when he paused in his remarks to acknowledge the survi-vors in the synagogue’s front row.
The visit comes amid a spate of Is-lamic extremist attacks in Europe, Africa, the Middle East and elsewhere—vio-lence which Francis has repeatedly con-demned as anathema to religion, partic-ularly given that Christians and religious minorities have often been the target.
“Violence of man against man is in contradiction to every religion that merits the name, in particular the three monotheistic religions,” Francis said, re-ferring to Christianity, Judaism and Islam. “Every human being, as a creature of God, is our brother regardless of his origins or religious belief.”
His sentiments were shared by mem-bers of the Jewish community, who sought to hold up the visit as a sign of interfaith friendship in the face of Mus-lim extremism.
“Today, the sad novelty is that after two centuries of disasters produced by nationalism and ideologies, violence has come back and it is fed and justi� ed by fanatic visions inspired by religion,” Rome’s chief rabbi, Riccardo Di Segni, told the pope.
“A meeting of peace between di� er-ent religious communities, as the one that is taking place today here in Rome, is a very strong sign against the invasion and abuse of religious violence.”
Francis’s visit is meant to continue the tradition of papal visits that began with Saint John Paul II in 1986 and con-tinued with Benedict XVI in 2010. It also highlighted the 50th anniversary of the revolution in Christian-Jewish relations sparked by the Second Vatican Council, the 1962-1965 meetings that brought the
church into the modern era.Among other things, the council doc-
ument “Nostra Aetate” repudiated the centuries-old charge that Jews as a whole were responsible for the death of Christ.
Francis said the declaration amount-ed to a “’yes’ to the rediscovery of the of the Jewish roots of Christianity and a ‘no’ to every form of anti-Semitism and a con-demnation of every insult, discrimination and persecution that is derived from it.”
Francis said several times that Jews were the “elder brothers” of Christians, repeating the words � rst uttered by John Paul during his historic visit to the syna-gogue 30 years ago. But he added that Christians also had “elder sisters” in the Jewish faith. Francis began his visit by lay-ing a wreath at a plaque outside the syna-gogue marking where Roman Jews were rounded up by the Nazis in 1943 and at another marking the slaying of a 2-year-old boy in an attack by Palestinians on the synagogue in 1982.
He met with members of the boy’s fam-ily and survivors of the attack before enter-ing the synagogue to rounds of warm ap-plause, which continued during his speech, interrupting him several times.
Francis, an Argentine Jesuit, has a longstanding friendship with the Jewish community in Argentina from his time as archbishop of Buenos Aires. At the same time, recent Vatican developments have displeased some in the Jewish commu-nity, including the Vatican’s recent treaty negotiated with the “state of Palestine.”
Such issues were left unsaid on Sun-day, though Jewish leaders made clear they would like for the pope and the Vati-can as a whole to acknowledge the spe-cial link Jews have with the land of Israel.
Francis recalled that during the Holo-caust, 6 million Jews were “victims of the most inhuman barbarism, perpetrated in the name of an ideology that wanted to replace God with man.”
“The Shoah teaches us that we must have maximum vigilance, to be able to intervene quickly in defense of human dignity and peace.”
The comments were notable because Benedict’s 2010 visit was marked by his defense of Pope Pius XII, the World War II-era pope accused by many Jews of having failed to do enough to protect Jews from the Holocaust. The Vatican has long maintained that Pius used behind-the-scenes diplomacy in a bid to save Jewish lives.
Francis made no mention of Pius. AP
POPE VISITS SYNAGOGUE, HITS RELIGIOUS VIOLENCE
Other life forms: First fl owers bloom on International Space Station
ZINNIA � owers on the International Space Station seen on January 16 are the � rst � owers grown in space as part of the Veggie facility and experiment. SCOTT KELLY/NASA/TNS
THE � rst � ower grown in space has bloomed.
National Aeronautics and Space Administration (Nasa) astro-naut Scott Kelly, International Space Station gardener, shared photos of the prized zinnias this weekend.
“Yes, there are other life forms in space,” Kelly said on Twitter.
The story of the delicate space � ow-ers is fraught with ups and downs, similar to gardens on Earth.
Just last month, the small crop wasn’t looking good. The leaves and buds were covered in mold because of a leak in the plant container.
“I’m going to have to channel my inner Mark Watney,” Kelly posted then, referencing the potato-growing skills of the astronaut in The Martian.
An unplanned spacewalk delayed � xing the problem in the space garden and by December 22 they were dying, Nasa’s Trent Smith said. Kelly had to act quickly to cut away the moldy leaves and dry the plant chamber.
By January 12 the plants were on the rebound and some buds had sprouted, Kelly said.
The bright zinnias are not the � rst crop of the Veggie experiment, but the lessons from their growing process could be applied to tomatoes, also a � owering planet, Smith said.
Red romaine lettuce was the � rst crop from the Veggie plant growth facility, installed in May 2014. Kelly and Astronaut Kjell Lindgren snacked on the second crop of lettuce in July 2015; the � rst crop was sent back to Earth for analysis.
The third round of the experi-ments will include Chinese cabbage and more lettuce. TNS
Tuesday, January 19, 2016 • Editor: Angel R. Calso
OpinionBusinessMirrorA10
Do not depend on the US
editorial
THERE is an advantage to being young—energetic, enthusiastic and ambitious for the future. The advantages of being more mature are wisdom of experience, a historical perspective and a greater
understanding of how conditions work.
The Philippines is a young country. While we date the end of Philippine prehistory by the Laguna Copperplate Inscription from 900 A.D. The Skirrid Mountain Inn in Wales is documented to have opened its doors for business in 1100 A.D. It is all about perspective.
But while the Philippines’s ancient history is long, it is our recent history that is limited. As one of our colleagues recently said, “You learned about that from reading Wikipedia; I learned about it from living it.”
By almost any measure—technological, financial, geopolitical—the 20th century was the American century. The Philippines was a part of America’s 20th-century journey. However, most of our personal experience and perspec-tive of the US begins post-World War 2. That was the golden age of the Ameri-can century with unprecedented economic growth.
Therefore, we do not understand the down times, as well as we should. The US and Europe lived the Great Depression of the 1930s. Asia and the Philippines have only read about it. When the depression hit the world, the Philippines was an agricultural nation, selling its products primarily to the US duty-free. The price of these agricultural goods fell, but it was actually a benefit to ordinary Filipinos as food prices decreased. Further, Washington provided virtually all of the funding for the large middle-class bureaucracy and for major construction projects.
Being left out of direct knowledge of what led to the Great Depression helped speed Asia toward its own financial crisis in 1997. We face a similar situation today.
The government is still depending on the US, both militarily and economi-cally in many ways, without seeing the warning signs that may make that trust in “Uncle Sam” misplaced.
Certainly, our financial professionals are well-educated and knowledge-able. But their collective wisdom is still grounded in the US, always being able to effectively deal with its problems like the oil crisis of the 1970s, and even the recent US Great Recession.
This time is may be different.When the US Federal Reserve (the Fed) raised its interest rates last month,
there was a collective sigh of relief, as certainly the Fed knows exactly what it is doing and has everything under control. However, the US economy is not strong with the current with the Federal Bank of Atlanta predicting a fourth- quarter grow of a meager 0.6 percent.
The point is that the last time the Fed raised interest rates in August 1936, after prolonged low rates and economic growth was very low within six months, the US went back into a severe recession. The US stock market fell 43 percent, even as the US dollar strongly appreciated.
THIS month has seen a shaky start for the economy, not only for the Philippines, but for the whole world. Everybody is pre-dicting slower growth for developing countries in 2016.
Shaky start, cautious optimism
This tells us how important exter-nal developments are to a president, particularly the president that will be elected in May. His or her perfor-mance will depend on what is going on in other countries, given the link-ages in the global economy.
If the other countries, particularly the Philippines’s peer economies, move fast, then we must move fast. If they slow down, the president must be able to meet the challenge to buck the trend.
Policy-makers should be alert in anticipating and analyzing changes in the global economy and their possible effect on the Philippines, so they can craft appropriate coun-tervailing measures.
No less than the International Monetary Fund (IMF) expects the growth of the global economy in 2016 to be “disappointing and patchy.”
In an Agence France Presse re-port based on an article in the Ger-man business daily Handelsblatt, IMF Managing Director Christine Lagarde cited rising interest rates in the United States, the economic slowdown in China, the persistent fragility of the financial system in some countries and the effects of low
prices on oil-producing countries. She also said that low productivity, aging populations and the fallout from the global financial crisis make the medium-term outlook cloudy.
Other institutions present similar projections on the global economy for this year. In its January 2016 Global Economic Prospects (GEP) report, the World Bank says simultaneous anemic growth in major emerging markets will weigh on global growth. However, the World Bank still ex-pects the global economy to grow by 2.9 percent in 2016, up from 2.4 percent in 2015, as advanced econo-mies accelerate.
Growth in China is forecast to slow down to 6.7 percent in 2016, from 6.9 percent in 2015. The slowdown in China will affect the growth of exporting countries like the Philippines, according to the United Nations Economic and So-cial Commission for Asia and the Pacific (Unescap).
Unescap lowered its growth fore-cast for the Philippines for 2016 to 6.3 percent, from 6.4 percent last December.
For its part, the Bangko Sentral ng Pilipinas (BSP) expects 2016 to
be both “riveting and challenging,” because of the volatile financial con-ditions abroad, including the sharp drop in the Chinese equities market, which affected markets around the world. In a speech at the Rotary Club of Manila this month, BSP Governor Amando M. Tetangco Jr. said the Philippines must remain watchful of threats to stability.
The most immediate impact of the China slowdown was felt by the local stock market. On January 11 the Philippine Stock Exchange in-dex (PSEi) closed at 6,288.26, down 287.17 points from the previous day. According to the PSE, it was the low-est PSEi close since February 18, 2014, when it closed at 6,193.97 points.
In a report, the BSP said for-eign portfolio investments, which include stocks traded on the PSE, recorded net outflows of $600 mil-lion in 2015, almost twice the $310- million net outflows in 2014. The outflows were mainly accounted for by PSE-listed securities, due mainly to profit taking, as well as concerns on the then imminent interest rates liftoff in the US and slowdown of the Chinese economy.
To make matters worse, even the much-needed long-term capital in the form of foreign direct invest-ments (FDI) is not flowing in as much as in other peer countries. In its GEP report, the World Bank noted that the Philippines contin-ued to lag behind its neighbors in attracting FDI.
The World Bank said Indonesia saw its highest FDI inflows since 1990, reaching $23 billion in 2014. Thailand saw its FDI rise to pre- crisis levels in 2014, while in
Vietnam, FDI flows continued to be robust and were directed to labor-in-tensive manufacturing production.
Based on the latest report from the BSP, net FDI inflows improved by 1.4 percent to reach $451 million in October 2015, compared to $445 million in the same month in 2014. For the first 10 months of the year, however, net FDI inflows totalled $4.99 billion, down 4.9 percent from $5.25 billion year-on-year. The BSP is targeting total net FDI of $6 billion for 2015. For 2016, the target is for a modest improvement to $6.3 billion. Actually, net FDI inflows breached the $6-billion mark in 2014, when it reached $6.2 billion.
Still, other major economies of the Association of Southeast Asian Nations continued to attract more capital than the Philippines. Data from the United Nations Conference on Trade and Development show that in 2014 Thailand attracted $12.6 billion. Vietnam received $9.2 billion FDI during the same year, according to a separate report from the World Bank. In 2012 the government announced a target of $10 billion in annual FDI. Based on its performance, however, the $10-billion target may remain an elusive dream for the Philippines.
These developments are among the factors that make January a shaky start for 2016. However, I am optimistic, despite the uncertainties on the external front, about the Phil-ippine economy’s prospects for 2016.
To be continued
For comments, e-mail [email protected] or visit www.mannyvillar.com.ph.
THE ENTREPRENEURManny B. Villar
A SWEEPING victory for Tai-wan’s independence-mind-ed Democratic Progres-
sive Party in this weekend’s elec-tions seems to guarantee a renewal of tensions with mainland China, which considers the island part of its sovereign territory. In fact, the vote could put relations on a more solid footing, if both sides exercise moderation in the coming months.
However striking the vote, this wasn’t a call for independence. While fewer and fewer Taiwanese want to reunify with the mainland, not that many more favor de jure in-dependence—only about a fifth of the population, according to recent polls. Indeed, while opinions vary about how closely Taiwan should or shouldn’t integrate its economy with the mainland’s, there’s little doubt most Taiwanese would like to main-tain the ambiguous political status quo. That means threats from Beijing
and adventurism from Taiwan’s new rulers are equally likely to provoke a popular backlash.
Neither side can afford that. Chi-nese President Xi Jinping is wrestling with a difficult economic transition that’s roiling global markets. And President-elect Tsai Ing-wen staked her campaign on revitalizing Tai-wan’s contracting economy. That’s going to require maintaining stable relations with the mainland—which absorbs around 40 percent of Tai-wan’s exports—even as she seeks to expand trade with other nations. China could easily block any bid by Taiwan to join the Trans-Pacific Part-nership, for instance—a pact that could, otherwise, provide a major boost to the island’s economy.
Xi already made a gesture of goodwill in meeting with Taiwan’s incumbent President Ma Ying-jeou last November—the first such sum-mit since 1945—even if his goal was
to bolster the electoral strength of Ma’s Kuomintang Party. Any credit Xi might have earned, though, would quickly be lost if he now sought to iso-late the leader Taiwanese have cho-sen. It would be more productive to leave open the option of sitting down with Tsai—who handled relations with the mainland under her party’s previous administration—after her inauguration in May. If Xi begins now to establish communication channels, it could both avoid mis-understandings and help Tsai rein in radicals in her own party, who might otherwise be emboldened by the size of their victory.
Tsai has, so far, been vague about her views on ties with the main-land. She’s refused to embrace the so-called 1992 Consensus, under which the two sides agreed that there was only “one China,” but disagreed about what that meant. Her fore-most task in the interregnum period
should be to find a new formula, one that is acceptable to Xi, as well. The fact is, while her supporters have valid concerns about the “hollowing out” of Taiwan’s economy as entre-preneurs and businesses shift to the mainland, the island would probably benefit from opening up further to Chinese investment and services, as South Korea and other Asian countries have. Tsai’s challenge is to lay the political groundwork for that opportunity.
The new administration may, indeed, pose a greater possibility for friction with China, but it also offers the potential for a more stable rap-prochement. In 2014 when Ma at-tempted to ram through a services trade pact with the mainland, angry students occupied the legislature. Tsai has more credibility to make deals with China, and both she and Xi would do well to take advantage of the opening. Bloomberg View
A new dawn for Taiwan and China
Tuesday, January 19, 2016
THE 2011 State of Philanthropy in Asia report by the Econo-mist Intelligence Unit (EIU) noted that among the five econo-mies studied (China, Hong Kong, Indonesia, the Philippines
and Singapore), the Philippines had the longest recorded history of organized giving.
Filipino giving
As early as the 16th Century, the Catholic Church channeled much of the endowments from the wealthy to the obras pias—literally, pious works—which were charitable foundations that took care of orphans, the sick and the elderly, and also helped finance and underwrite the cargo of the Manila-Acapulco Galleon Trade.
After the trade ended in 1815, some obras pias funds were funneled to the first banks of the Philippines, in-cluding the Monte de Piedad (Mount of Piety), founded by the Spanish Francis-can friar Felix Huerta. With the back-ing of the Archdiocese of Manila and
Governor General Domingo Moriones Murillo, Huerta set up the Monte de Pie-dad in 1882 patterned after the pawn-broker institutions across Europe at the time that loaned to the poor at modest interest rates.
During the American occupation, Protestant missions brought their own charitable traditions founding hospices, hospitals, schools and orphanages.
In 1901 the Presbyterian Board of Foreign Missions founded what would become Siliman University in Duma-guete. Four years later, the American Baptist Foreign Mission Society laid the beginnings of Central Philippine
University in Iloilo City with a sizable grant from American philanthropist John D. Rockefeller.
Today, institutional giving in the Philippines remains dynamic. A 2014 Singapore Management University study on philanthropy in Southeast Asia finds that the Philippine philanthropic sector is fairly mature compared to its neighbors, noting that the Constitu-tion explicitly recognizes civil society’s developmental role.
Since Forbes Asia started its annual listing of Asian philanthropy heroes in 2004, Filipino entrepreneurs and taipans have consistently been cited.
Techno-entrepreneur Dado Bana-tao was recognized in 2015 for making a $1.5-million grant to the Philippine Development Foundation, which he set up to help reduce poverty through educa-tion, innovation and entrepreneurship.
In 2014 Enrique Razon Jr. of the In-ternational Container Terminal Services Inc. was cited for initiating efforts to re-build areas devastated by Supertyphoon Yolanda, including the Tacloban airport, and raising $5.7 million for a hospital.
In the same year, Ricardo S. Po. Sr., founder and chairman of the Century Pacific Group, was recognized for his
work with the CPG-RSPo Foundation that helps serve up to 3 million meals a year to schoolchildren.
Last December the SM Foundation—the social development arm of the SM group of companies—was given the Outstanding Exemplar in the Private Sector Award for the various programs in education, health care, livelihood, shelter and environmental protection that the foundation has been support-ing since 1983.
The Outstanding Exemplar Award is given out annually by the media forum Bulong Pulungan to individuals from both government and private sector who have made significant contribu-tions to society.
To celebrate his 60th birthday last year, Hans Sy, SM Prime Holdings pres-ident, inaugurated a six-story building in Paco, Manila, which he donated to CHILD Haus (Center for Health Improve-ment and Life Development)—the half-way house run by beauty expert Ricky Reyes for indigent children stricken with cancer.
Filipino philanthropy is alive and vibrant.
E-mail: [email protected].
IN the recent Saturday Forum@Annabel’s, we had as our guest child-rights advocate Atty. Eric Mallonga, who is the executive director of an orphanage, Meritzell Children’s World Foundation,
which its web site describes as “a loving and caring environment for abandoned, neglected, orphaned and abused children.”
Oligarch, cartel and rent-seeking
IF you are going to bash the Philippines and its economics—which seems to be a new vocation for some people—it probably makes sense to use terms that are universally “evil.” You should also
throw these terms around in a general sense, instead of giving con-crete examples that apply to the Philippines. These are oligarch, cartel and rent-seeking.
Oligarch is an ancient Greek term to describe economic or po-litical power held by the few to the oppression of the many. The Athe-nians in the fourth century B.C. were so concerned about this that they selected government officials using a lottery system rather than an election. The way the current Philippine election is going, maybe that is not a bad idea. The Greeks worried that a professional govern-ing class would arise and use their positions for their own benefit.
It took Filipinos 2,400 years to invent the word trapo to describe these political oppressors.
Depending on you who ask, 158, 64, 13, 10 or five families actually control the world. You can prob-ably apply the same number to the Philippines.
However, from an economic standpoint an oligarchic system, is bad because it limits competition to the detriment of the consumer and the ordinary citizen. There are a limited number of families or corporations that have an outsized influence and even control on busi-ness in the Philippines.
The best example might be found in the banking industry. Yet, in reality, the banking sector is fiercely competitive. When you see branches of four major banks across the street of one another, that does not indicate a lack of com-petition regardless of the oligarchic nature of the business. In addition, numerous evaluations from inter-national institutions have shown the Philippine banking system to be the strongest on earth. Maybe an oligarchic system where the banks’ management owns the banks might be beneficial.
When Lehman Brothers col-lapsed and started the current global financial crisis, there were not any actual “Lehman brothers” running the bank who lost their fortunes; only bankers who lost their multimillion-dollar annual bonuses.
What is interesting also is that the Filipino oligarchies also have stakes in property development. The Philippine property sector is also fiercely competitive with at least a dozen “top” developers and at least as many smaller but formi-dable property companies.
A cartel is formed by compet-ing firms to control the market and prices, but, most important, to keep competitors out. We speak of a “rice cartel” that controls prices and, of course—everyone’s favorite cartel —the Philippine telecoms industry with the market shared by two companies.
We are told it is this telecoms cartel that keeps service low and prices high. Look at Japan. There are many cell-phone companies. But
then again, in Germany, Deutsche Telekom holds an 82-percent market share, as does SingTel in Singapore.
In France two companies hold a combined 77-percent share. In the US three companies hold an 85-percent market share.
The most noncompetitive busi-ness in the Philippines is beer, with San Miguel (holding more than 80 percent of the market) and Asia Brewery cornering virtually 100 percent of the market. Why aren’t we protesting that “cartel”?
Rent-seeking is when a com-pany or individual gets profits or economic gain without creating any wealth for the society. The classic example is the feudal lord that blocks the river that flows through his property and charges people to cross it. But rent-seeking is the most misused economic term even by supposedly intelligent and knowledgeable people.
Rent-seeking in its worst form is a company that “bribes” govern-ment to pass a law providing gov-ernment subsidies to consumers for buying a particular product.
The worst examples of this are found in “renewable energy” or in paying government officials to build a road on a particular prop-erty. Shopping malls gain prof-its from rent but also create an infrastructure that creates jobs and wealth.
Using these terms incorrectly detracts from trying to actually build an economy with less wealth and income disparity, and to pro-vide wealth creation for a great number of people.
However, the Philippines does have a major problem—as do all nations in the current economic environment—with oligarch, car-tel and rent-seeking.
The No. 1 oligarch in the Phil-ippines controls 22 percent of the total economic output of P13.2 trillion for 2016. The Philippine government budget for 2016 of P3 trillion is equal to 22 percent of the gross domestic product.
The Philippine government is the largest cartel, deciding who can or cannot compete, setting taxi and jeepney fares and choosing those who can or cannot import rice. The government, like the cartels, picks the winners and the losers and cre-ates other cartels, as in telecoms.
And which company or industry could possibly compete with the government for gaining economic reward without creating an equal amount of wealth for society?
E-mail me at [email protected]. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
ABOUT TOWNErnesto M. Hilario
Sen. Edgardo J. Angara
and portions of Cavite can expect sufficient water supply in the years ahead, as Maynilad Water Services Inc. (MWSI)—one of the two water concessionaires in the area—is spend-ing a total of P13.6 billion on capital expenditures (capex) this year. Maynilad’s planned capex spend-ing will benefit consumers and the economy. One, its huge outlay for infra-structure works will ensure a steady, adequate supply of clean water for West Zone consumers and allow it to launch pipeline-expansion projects for city folks in remote communities who continue to buy expensive water from informal suppliers or vendors. Of Maynilad’s capex budget, P3.9 billion will go to the construction, re-habilitation and upgrade of reservoirs, pumping stations and water-treat-ment plants; P2 billion for non-revenue water (NRW) reduction programs, like leak repairs and pipe replacements; P4.6 billion for the construction of sewage-treatment plants or improve-ment of existing plants in Manila, Que-zon City and Cavite; and P1.2 billion for building conveyance systems and development of sewerage facilities in Quezon City and Valenzuela. The rest of the budget will be used, among others, to modernize Mayni-lad’s data management and infor-mation systems, develop new water sources, and refurbish its facilities in the Bicti basins and Ipo Dam. Two, Maynilad’s infrastructure works will help sustain the domestic economy as its significant capex spend-ing is projected to create 41,243 jobs in its concession area. And three, Maynilad’s capex bud-get underscores its firm commitment to consumer welfare, considering that it has chosen to set aside such a big amount to improve and even expand its water-delivery services despite its ongoing legal tussle abroad with the Manila Waterwork and Sewerage Sys-tem (MWSS), which involves the regu-latory agency’s continued rejection for three years now of key provisions of their 1997 privatization deal. Maynilad filed two successive arbi-tration cases before the International Chamber of Commerce (ICC) in Singa-pore last year following the refusal of the MWSS to follow the terms of the firm’s original concession contract with the government in 1997 on a
rate-rebasing mechanism that would allow the concessionaire to adjust its water rates once every three years. Maynilad has been allotting some P10 billion yearly for its operations, including projects to improve water delivery to customers and expand service to cover more areas. Because such improvement or expansion programs take years to finish, the rate-rebasing process done once ev-ery three years is intended to make Maynilad plan its financial require-ments and recover its multibillion-peso capex or investments. The water situation was so dire two decades ago that Congress passed the National Crisis Act (Republic Act 8041) in 1995, empowering the government to modernize MWSS’s debt-saddled and inefficient opera-tions by privatizing them. Under the privatization program, MWSS’s franchise area—covering the entire Metro Manila and Rizal plus parts of Cavite—was split into the West and East zones, and its many contractors and service providers were replaced by just one exclusive contrac-tor or concessionaire for each zone. Consistent with the privatization program prepared by MWSS with the Department of Public Works and High-ways (DPWH) and two consultants—the World Bank ’s International Finance Corp. and NERA Economic Consulting—the concessions were publicly auctioned off in 1997, with Maynilad and Manila Water winning the concessions for the respective West and East zones. However, financial and legal trou-bles forced the original West Zone concessionaire—Benpres Holdings Corp.—to return the concession to MWSS in 2004. Two years later the Metro Pacific Investments Corp.-DMCI consortium won the exclusive rights to provide water and wastewater services to the West Zone. To attract big-time investors, the government offered provisions in the 1997 privatization contracts allowing would-be concessionaires to recover their multibillion-peso investments in the course of their long-term service contracts. Among these provisions was allowing concessionaires to pass on certain corporate taxes to their customers in their monthly bills.
E-mail: ernhil:@yahoo.com.
OUTSIDE THE BOXJohn Mangun
Should Carpio inhibit from Poe DQ case?
At the outset, Mallonga argued that a foundling like presidential aspirant Grace Poe is a natural-born citizen and therefore should be allowed to run for the highest elective position in the country. While both the 1935 and the 1987 Constitutions do not contain any explicit provisions on the rights of foundlings, Mallonga said both documents presume that foundlings are natural-born citizens and should, thus, be allowed to become profession-als, or even run for president. International conventions to which the Philippines is a signatory—and which the Constitution recognizes as part of the law of the land—also guarantee the rights of foundlings to a name and a nationality, among oth-ers, he added. The disqualification cases against Poe assert that she is not a natural-born citizen and does not fulfill the 10-year residency requirement since she stayed in the US for some time. While the nine-member Senate Electoral Tribunal ruled that she is a natural-born citizen and therefore eligible to run as senator and keep her position, the Commission on Elections (Comelec) ruled otherwise. Thus, Poe has filed an appeal before the Supreme Court (SC) to reverse the Comelec rul-ing. The oral arguments will be heard today, January 19, by the SC. Sen. Francis Escudero has urged Se-nior Associate Justice Antonio Carpio, the SET chairman who argued that Poe is not a natural-born citizen, to inhibit from participating in the disqualifica-tion case against his running mate. “Senator Grace’s lawyers also asked for his inhibition. I hope he will con-sider it and inhibit himself in order to address such doubts from some sectors
regarding his impartiality in connec-tion with the cases of Senator Poe,” Escudero said. Poe filed last month petitions before the SC to prevent Car-pio and Justices Teresita Leonardo-de Castro and Arturo Brion from joining deliberations of the tribunal. For his part, Mallonga says that since Justice Carpio during the SET hearings specifically pronounced that Poe is not a natural-born citizen but just a naturalized citizen, the jurist made a conclusive pronouncement that showed his bias and preconceived notion against her. “A mere clarificatory hearing is not supposed to hear the arguments of the justices or the senators but to hear the stand or positions of the par-ties involved. So I really believe that the justices who actually made such pronouncements should inhibit them-selves from the deliberations on the qualifications of Senator Poe as a can-didate for the position of president,” Mallonga said at the news forum. “During the clarificatory hearing, [what Carpio said] was actually not a clarification. He issued a conclusion of the law and not a clarification.” For this reason, Carpio committed “grave abuse of discretion,” Mallonga said. “If you are still hearing a case, you should not make any conclusion of law because the conclusion of law should come out in your decision,” he said. Poe is a foundling adopted by the late actor Fernando Poe Jr. and his wife Susan Roces. She was found inside the Jaro Cathedral in Iloilo in 1968. The 1935 Constitution was in effect at the time of her birth.
Relief for water consumers WATER consumers in Metro Manila
The UK can survive a Trump visitSURELY the British Parlia-
ment has a better way to spend three hours.
On Monday members of parlia-ments (MPs) will debate the merits of a petition signed by more than 500,000 Britons demanding that the government block Donald Trump from setting foot on their sceptered isle. It might be the worst idea since London Mayor Boris Johnson decided to ride a zipline during the 2012 Olympics—and to his credit, Prime Minister David
Cameron’s government has declared there’s no chance of it happening.
Nevertheless, British law re-quires parliament to debate any pe-tition receiving 100,000 signatures. Whether Trump should be banned is a question that can be dispensed with quickly, and then maybe that famous British talent for oratory can be devoted to a reaffirmation of the value of free speech.
The petition’s supporters are appal led—understandably so—
at Trump’s demagogic tendencies. Trump has said he would prohibit foreign Muslims from entering the US until the federal government can “figure out what is going on” concern-ing Islamic terrorism. He’s also played to nativist feelings by alleging that Mexico is sending its worst people—drug dealers and rapists—north of the border.
Trump’s pandering to antiforeign sentiment, while odious, has earned him a following among Americans.
Britons are not seeking to bar those who say quietly what Trump says loudly, and for good reason: De-mocracies require tolerance of widely diverging political viewpoints. More-over, attempts to suppress them are inevitably counterproductive. Trump, like an author whose book is banned, could not ask the British public for better publicity.
British policy allows the Home Office to bar foreigners who engage in “unacceptable behaviors.” Among
those caught in this dragnet is con-servative American radio host Mi-chael Savage, whose nativist views have been deemed a threat to public security by the UK.
Maybe those MPs can also debate why Savage is banned. A British ban on Geert Wilders, the Dutch politician who wants to prohibit the construction of mosques and selling of the Koran, did not withstand judicial scrutiny, and Britain appears to have survived his subsequent visit unscathed.
Likewise, it has survived visits from Trump, who owns two golf courses in Scotland and has traveled to the UK many times without incident (he never travels without controversy, which is not quite the same thing).
Governments are justified in bar-ring foreigners who advocate or incite violence and terrorism. But that power ought to be used with the greatest of care, and not in response to petitions fueled by political passions.
Bloomberg View
A12
2ndFront PageBusinessMirror
www.businessmirror.com.ph
2Tuesday, January 19, 2016
Products covered under the EU’s Generalized System of Preferences Plus
6,274
PHL-EU bilateral trade seen breaching €13B B C N. P
BILATERAL trade between the Philippines and the 28-member European Union (EU) is seen
hitting a record high in 2015, even as competing Asean neighbors continue to outpace the country in ramping up trade with the bloc.
the same period in 2014. Overall, EU-Asean trade in goods as of September 2015 grew by 13 per-cent compared to 2014, faster than the Philippines’s 7-percent growth, van Hattum said.
As a result, the Philippines’s share in total trade in goods with the EU decreased to 6.6 percent as of the third quarter of 2015, from 7-per-cent share in 2014. Based on the EU-Philippines Trade and Investment Fact file pub-lished by the EU Delegation in Ma-nila, in 2014 EU’s total trade with select Asean nations are Malaysia, €33.7 billion; Thailand, €30.98 billion; Vietnam, €28.25 billion; Indonesia, €23.89 billion. On the exports side, the EU-GSP+ has been bearing fruit. Products that had positive tariff rates before the EU-GSP+ and were subsequently slashed to zero percent saw an increase, the EU Delegation official said.
Shipments of food and beverages covered by the scheme increased by 36.7 percent, while textiles improved by 15 percent.
Not all Philippine exports to the EU are covered by the preferential treatment. Some 6,274 tariff lines are covered, representing a fifth of total Philippine exports to the EU. On the covered products, ex-ports increased 27 percent, or from €584,292.58 in 2014
to €742,788.28. The products that registered the highest growth rate, possibly due to smaller base volume, are live animals and animal products, fish and related products, cereals, flour, nuts, chemi-cals, plastics, wood and wood charcoal and footwear, to name a few.
Utilization of the EU-GSP+—measured by comparing the ex- ports that increased compared to the total exports that are eligible under the scheme—is going down, van Hattum said. In 2014 €1.88 bil-lion were eligible under the scheme, and 65 percent was utilized.
The utilization rate has gone down, but the exact percentage was not disclosed. On the declining rate, van Hattum noted that an exact reason cannot be given, but possi-bly, there may be a lack of aware-ness on the part of exporters and difficulty on complying with the rules of origin requirements. These modest accomplishments are good starting points, as the Philippines and the EU are about to commence official negotiations for an EU-Philippines free-trade agreement, thereby cementing the preferential trade and invest-ment relations between the trad-ing partners. After three years on the “scoping” stage, where both sides agree on the general areas of coverage and determine their po-tential offensive and defensive
interests, the parties announced last December to launch in the first half of 2016 the official ne-gotiations. According to Undersec-retary for Industry Development and Trade Policy Ceferino S. Rodolfo, this was due to the gains made by the Philippines on policy reforms.
“They saw our efforts in pass-ing the competition law, even after two decades. Then there’s the cabotage law, and also the liberalization of the banking sec-tor for foreign players,” Rodolfo said in an earlier interview. “All of these are for good gover-nance and for liberalization, and they saw that reform efforts will continue. They became confident about the Philippines,” the trade official added. According to van Hattum, the parties have the intention of con-cluding an agreement that covers the elimination of customs duties and other barriers to trade, services and investment; access to public procurement markets, as well as additional disciplines in the area of competition; and protection of intellectual property rights. “The prospective agreement will also include a comprehensive chapter that will ensure that closer economic relations between the EU and the Philippines go hand in hand with environmental protection and social development,” he added.
Last-quarter figures are still un-available, but Philippine-EU trade in 2015 is seen breaching the €13-bil-lion level, assuring at least a 4-per-cent growth over 2014’s €12.5-bil-lion haul, the Economic and Trade Section chief said at the EU Delega-tion in Manila.
“Eurostat figures are available up to September 2015, and show that overall trade has grown by 7 per-cent since 2014 in euros, totalling €9.7 billion for the first three quar-ters—indicating that 2015 could hit the €13-billion level, which would, indeed, be a new record,” Walter van Hattum said in an e-mail interview with the BM.
The growth in trade can be at-tributed to the recovering European economy, boosted further by the ini-tial gains in the Philippines’s export performance due to the preferential
trade scheme, the Generalized Sys-tem of Preferences Plus (GSP+), that came into effect by the end of 2014. Total exports from the Philip-pines jumped 19 percent, while EU’s shipments to the Philippines slowed down by -3 percent, leading to a trade surplus for the Philippines.
Exports of goods to the EU, spe-cifically, grew by 7 percent in the nine months of 2015, compared to
a three-year period, during which NGP partners enjoy compensation for seedling production, site prepa-ration, tree planting, maintenance and protection. The incentive is the compensation that NGP partners receive for every NGP site on a per-hectare basis. In 2015 the cost of the NGP is P10,000 per hectare. This year the DENR is consider-ing to raise the cost to P20,800 per hectare, because the number of trees to be planted will also increase from an average of 500 trees per hectare to 1,600 per hectare. Incidentally, many of the NGP con-tracts entered into by the DENR with NGP partners in 2011 and 2012 have already expired. Upon the expiration of the contracts, which is specifically for site maintenance and protection,
the DENR turns them over to lo-cal government units (LGUs) or the implementing NGP partners.
The incentive system, the official said, will encourage POs to maintain the forest plantations, ensuring sus-tainability of the program even after their contracts expire. “We are looking at incentivizing POs starting in 2017,” he said. “This will ensure that they will not resort to illegal activities,” he added.
Calderon said members of POs earn extra income because of the “green jobs” generated through the NGP. He expressed fears that the NGP sites may be neglected, or worse, overexploited if those who used to benefit from its mainte-nance and protection would no longer receive compensation. “After the contracts, they may be tempted to log or produce charcoal
again,” Calderon said.According to Calderon, upland
dwellers have already adjusted to a way of life wherein they no longer illegally cut trees for extra income.
Upland dwellers have changed their ways because of the total log ban and the implementation of the NGP.
“Incentivizing POs for their per-formance will give them a reason to take care of the forest plantations they established,” he said.
The NGP, which aims to plant 1.5 billion trees in 1.5 million hectares from 2011 to 2016 had so far gener-ated close to 2.9 million green jobs during its five years of implemen-tation. Last year alone, a total of 636,710 jobs were generated by the NGP. Because of the success of the program, President Aquino signed Executive Order 193, expanding its coverage between 2016 and 2028.
DENR eyes incentives for ‘greening’ partners
PRICE CUT A customer does grocery shopping in Makati City. The Department of Trade and Industry has appealed for a rollback in the suggested retail prices of basic commodities, following a series of reduction in fuel prices. NONIE REYES
C A