www.businessmirror.com.ph n�Saturday 18, 2014 Vol. 10 No. 40 P. | | 7 DAYS A WEEKn�Wednesday, June 10, 2015 Vol. 10 No. 244

A broader look at today’s businessBusinessMirrorBusinessMirrorTHREETIME

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

ROTARY CLUB

JOURNALISM

C A

PESO EXCHANGE RATES n US 45.1030 n JAPAN 0.3624 n UK 69.2241 n HK 5.8187 n CHINA 7.2681 n SINGAPORE 33.3528 n AUSTRALIA 34.4903 n EU 50.9168 n SAUDI ARABIA 12.0275 Source: BSP (9 June 2015)

Jobless rate worsens in NCRGOV’T SAYS HIGHEST UNEMPLOYMENT RATE RECORDED IN PHL’S CAPITAL REGION IN APRIL

S “O,” AAyala Land fast-tracks construction of offices in Arca South project

WANTED: FRESH IDEAS FOR EL NIÑO MITIGATION SPECIAL REPORT

THE Pantabangan Lake, the reservoir of the Pantabangan Dam in Nueva Ecija that is considered one of the largest in Southeast Asia, is approaching critical level at 178.94 meters, or less than 2 meters from the critical level of 177 meters above sea level. NONIE REYES

B A S. D | Correspondent M G P

Conclusion

ENSURING water supply, according to ex-perts, is critical to help farmers cope with the ill effects of El Niño. Experts, such as

Dr. Roehlano Briones of the Philippine Insti-tute for Development Studies (PIDS), pushed for reforms in the water sector. In fairness to the government, Briones said, it has a number of El Niño mitigation measures in place. These include the “quick turnaround” scheme, which calls on rice farmers to plant a third crop, as well as cloud-seeding operations. But the most crucial, experts said, is find-ing ways on how to deal with water availability considering the decline in resources.

“Problems [like El Niño] can recur and, in the long run, we will be facing greater demand

for water, not less,” Briones said.“But then, we also know that water-resource

availability is not increasing but probably de-clining because of the state of our watersheds. Also, the availability of water will be less, rather than more stable, in the years to come because of climate change,” he added.

The government’s priority, Briones said, is to ensure the efficiency of the country’s irrigation system. A PIDS study earlier noted that the ac-tual irrigated areas for most irrigation systems in the country had all been consistently below the target.

The study, titled “Appraisal of Methodol-ogy in Estimating Irrigable Areas and Process of Evaluating Feasibility of National Irrigation Administration Projects,” said this has been due mainly to “overestimation” of irrigable areas by not fully accounting for built-up ar-eas or urbanization, flooded areas during the wet season and elevated areas that cannot be

reached by gravity irrigation systems.Briones added that it also does not help

that the country’s watersheds are already denuded. Figures from the United Nations Food and Agriculture Organization showed that the country’s forest cover declined to around 20 percent in 2007, from 90 percent in 1934. Rolando Dy, executive director of the Uni-versity of Asia and the Pacific’s Center for Food and Agribusiness, said consumers must also be encouraged to eat farm products that require less water to produce.

“We Filipinos should also partly change our consumption habits. Demand for water will only continue to rise if we continue to eat rice, which is water-intensive,” Dy said.

He said Filipino consumers may consider eat-ing banana and camote, which do not require a lot of water to grow.

THE country’s capital region, which hosts the biggest business districts, recorded the most number of

unemployed Filipinos in April, according to the latest data from the Philippine Statistics Authority (PSA).

B VG C

AYALA Land Inc. (ALI) on Tuesday vowed to complete the initial development

work, or phase one, of its P80-bil-lion Arca South project in Taguig City, which had been accelerated as a result of high demand. Company officials said they have already spent about half of the budget for the development of the project in the former Food Terminal Inc. complex.

Phase-one development in-cludes roadwork, utilities and other infrastructure, which are now 70- percent complete. The entire proj-ect was seen completed by the end of the year, said Stephen Comia, the company’s project development

manager of its strategic land-bank management group.

“First movers to Arca South have a distinct advantage. Their foresight has led them to an area that will be driving unprecedented growth in the south. Land values appreciated by 39 percent in less than a year,” he said. He added, however, that real- estate prices in Arca South are at a 30-percent discount compared with prices at Bonifacio Global City, which is a separate development project of ALI. Development at Arca South was conceptualized at 50-50 commercial and residential mix. Commercial lots, averaging 2,500 square meters, have been sold out across the estate.

C A

C A

In the April Labor Force Survey (LFS), PSA figures showed that the National Capital Region (NCR) re-corded an unemployment rate of 9.3 percent, higher than the national figure of 6.4 percent.

“Among the regions, the NCR, Ilocos region, Central Luzon and Calabarzon had unemployment rates higher than the national fig-ure,” the PSA said. For the entire Philippines, the PSA said unemployment rate eased to 6.4 percent in April, from 7

percent recorded in the same pe-riod last year. “This translates to 495,000 more employed Filipinos and reduced the total number of un-employed to 2.7 million,” Economic Planning Secretary Arsenio M. Bali-sacan said in a statement. Among the unemployed persons in April 2015, 63.1 percent were males. Of the total unemployed, the age group 15 to 24 comprised 50.4 percent, while the age group 25 to 34, 30.1 percent.

To produce 1 kilogram of palay, Dy noted that farmers use 5 cubic meter (cum) of irrigation water. “So for 4,000 kg of palay, a farmer must use 20,000 cum.” Dy said the government must se-riously consider conserving water in small farm reservoirs—a strategy that is being done by India and Israel. “Our terrain is suitable for small farm reservoirs but we have very few of those,” he said. Despite all this, Philippine farm output manages to post growth but the increases are below the targets indicated in the Aquino ad-ministration’s blueprint dubbed as the Philippine Development Plan 2011-2016. Data from the Philip-

pine Statistics Authority (PSA) showed that that local farm pro-duction grew 1.78 percent in the first quarter of the year. The PSA said this is largely due to the good performance of the crops subsector which accounted for more than half of farm output in January to March. Figures showed that the output of the crops subsector rose by 1.65 percent during the period. But PSA data indicated that rice production declined by 6.09 per-cent, to 4.75 million MT (MMT), from 5.06 MMT in the fourth quar-ter of 2014. In its latest forecast, the PSA said palay output could decline in the second quarter of the year due to the prolonged dry spell. The country’s palay production could go down by 4.21 percent to

3.9 MMT in April to June this year, from 4.07 MMT recorded in the second quarter of 2014. The PSA said harvest area in the second quar-ter may contract by 2.29 percent to 918,000 hectares, while yield may go down to 4.25 MT per hectare, from 4.34 MT per hectare. Corn output is also expected to go down by 14.38 percent to 1.02 MMT, as harvest area is expected to decline by 13.84 percent to 335,810 hectares. Alcala said that there will be enough food despite the threat posed by the El Niño weather phe-nomenon. “Hindi po tayo mananalan-gin na lang para maipatupad ang mga interventions natin sa El Niño [We will not just pray; we will continue to implement our El Niño mitiga-tion efforts].”

Top CEOs. . . Continued from A8

BusinessMirrorWednesday, June 10, 2015 news@businessmirror.com.ph A2

BMReports

Continued from A1

Wanted: Fresh ideas for El Niño mitigation

With less money coming in, the percentage of CEOs expecting to in-crease capital spending and hiring also fell. Just 35 percent said they expect-ed to boost spending, compared with 45 percent in the first quarter. And more CEOs said they would hold off on hiring additional employees and even would lay off some workers. About 34 percent said they ex-pected to increase their company’s

US employment, down from 40 per-cent in the first quarter. Meanwhile, 26 percent said they would reduce employment, up from 23 percent in the first quarter. The survey of 128 CEOs was conducted from April 22 to May 13, before the Commerce Depart-ment reported that the economy contracted at a 0.7 percent annual rate in the first quarter.

Economists said the quarterly contraction - just the third since the end of the Great Recession

in 2009—was caused by unusu-ally severe winter weather, a West Coast ports dispute and the rising value of the US dollar as other major economies struggle. “Obviously, a strengthening dol-lar and weak growth abroad have taken their toll on the US economy,” Stephenson said. LA Times

By Jovee Marie N. dela Cruz

The house Committee on energy on Tuesday approved a substitute measure amending the electric Power Industry

Reform Act (epira). Party-list Rep. Michael Angelo Rivera of 1-Care, presiding chairman of the energy committee during the panel hearing, said that the substitute bill, principally authored by house Committee on energy Chairman and Liberal Party Rep. Reynaldo V. Umali of Oriental Mindoro, has been unanimously approved at the committee level. The committee report of the substitute bill or an act declaring power infrastructure projects as projects of national significance, amending for the purpose certain provisions of Republic Act (RA) 9136, or the electric Power Reform Act of 2001, is now being

prepared to be presented in the plenary for second reading in July or August. The bill provides that to ensure timely completion of power projects for energy security and minimize costs by declaring power infrastructures as projects of national significance, imbued with public interest. The substitute measure also inserted new section, which provides that the power of the president may upon the certification and recommendation of the energy secretary, classify certain power infrastructure projects, including but not limited to generation, transmission and distribution facilities, undertaken this act as projects of national significance which shall be entitled to the following incentives: ■ all real properties which are actually and directly used for the project will be exempted from any and all real property

taxes levied under RA 7160, or the local Government Code of 1991. ■ the sum of all local taxes imposed by a province, city or municipality pursuant to RA 7160, as amended, on the proponent should not exceed 50 percent of 1 percent of the gross sales or receipts of the preceding calendar year. ■ the required business permits, including any renewals thereof, should have been deemed to have been automatically granted or issued to the winning project proponent upon tender of the required taxes and fees to the appropriate local government unit. Moreover, Rivera said the committee will also insert the proposal of Nacionalista Party Rep. henry Oaminal of Misamis Occidental prohibiting the privatization of Agus-Pulangi hydroelectric power complex in Mindanao.

House panel oKs substitute bill amending epira law

PhiliPPine stocks fell for a fourth day, sending the bench-mark index to the lowest level

since January, as capital outflows con-tinue amid concern economic growth is weakening. The Philippine Stock exchange index fell 1.4 percent to 7,379.5 at 10:46 a.m. in Manila on Tuesday, bound for the lowest close since January 12. JG Summit holdings inc. and SM Prime holdings inc. led losses, declining at least 2.7 percent. international investors sold a net $11.8 million of shares on Monday, following

six straight weekly outflows. “investors are looking for something to hold onto, to overcome the first-quarter GDP [gross domestic product] disappointment,” said Justino Calaycay, an analyst at Manila-based Accord Capi-tal equities Corp. “A big part of inves-tor confidence has been lost because of weak GDP, and a weakening peso is eroding gains of international inves-tors with exposure to the Philippines, fueling further foreign selling.” The Philippine stock gauge has re-treated 9.1 percent since climbing to

a record 8,127.48 on April 10, heading for the 10-percent decline some inves-tors define as a correction. The peso has dropped 1.5 percent in the same period. The equity gauge sank 2.9 percent in the week ended May 29, the worst loss since December 2013, after government data showed first-quarter economic growth weakened to a three-year low, missing estimates. it trades at 18.1 times projected 12-months earnings, still the most expensive in Southeast Asia, while the MSCi emerging Markets index is val-ued at a multiple of 11.8. Bloomberg News

Philippine stocks decline to 5-month low

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

Senior Supt. Rodolfo Recomono, Pampanga police com-mander, said the suspects were rebels who have turned criminal and operated in Pampanga and other provinces in Central Luzon.

Recomono said investigators were still establishing the iden-tities of the fatalities, one of them is woman.

He said the five were members of the Marxist-Lenin-ist Party of the Philippines-Rebolusyonaryong Hukbong Bayan (MLPP-RHB), a group that broke away from the mainstream Communist Party of the Philippines-New People’s Army.

Recomono said some members of the group were still op-erating in Pampanga and other provinces in Central Luzon.

A sketchy report sent by Recomono to the National Police general headquarters at Camp Rafael Crame, Quezon City, said the death of the five rebels-turned-criminals happened after an encounter with a joint team of policemen from the Pampanga police, Special Weapons and Tactics Team and the Mexico police station.

He said the encounter happened at around 12 a.m. on Tues-day at Barangay San Jose Matulid, Mexico, Pampanga.

After the firefight, the policemen recovered an M-16 rifle, a hand grenade, two caliber .30 carbines, two caliber .38 revolv-ers, four other short firearms, a motorcycle and communica-tions equipment.

Recomono said the local police has been monitoring the group following its members’ alleged involvement in various criminal activities in Pampanga and nearby provinces.

“The suspects were involved in robbery holdup, carjacking, gun-for-hire and extortion activities in Pampanga and nearby provinces of Region 3,” he said.

Meanwhile, a Moro integree with the Army was shot and killed on Monday in Zamboanga del Sur while buying a food for his hospitalized son, the military said.

Lt. Col. Audie Mongao, public affairs officer of the Army’s First Infantry “Tabak” Division, identified the victim as Maj. Ibno Kalid Hassan, 56, who was assigned at the Headquarters and Headquarters Service Battalion, 1ID, Labangan, Zambo-anga del Sur.

Mongao said Hassan was shot by a lone assailant at around 7:10 p.m. at the corner of Pulmones and Sabellano Streets, Ba-rangay San Pedro, Pagadian City.

He said Hassan, who was integrated into the Armed Forces from the Moro National Liberation Front, was buying a food from a store for his son who was presently confined in the city’s hospital when he was shot four times.

Pampanga cops kill five rebels

By Lyn Resurreccion

SEOUL—Experts in South Korea said schools in the country may remain shut for “several more days” until they are able to fully understand

the nature of the Middle East Respiratory Syndrome (MERS) despite findings that it is not transmitted by air.They also said that wearing masks is important to prevent the transmission of the virus and to protect those who are not infected.

However, people in the streets and at the airport

interviewed by the BusinessMirror do not care about the virus. Only a few wear face masks and most of them are middle-aged persons.

“It’s not serious,” two college male students, who refuse to wear masks, said.

“Don’t wear masks anymore,” a woman airport at-tendant said. “The scare is only caused by [the] media.”

Recent reports said more than 2,000 schools have been closed in South Korea and the infection has killed seven and afflicted around 100.

“Separation is very important,” Kee-jong Hong,

director of Institut Pasteur, told the BusinessMirror when asked why the schools were closed despite the non-transmission of the virus in areas other than hospitals.

“[They could be closed for] several more days,” he added. Hong told the more than 1,000 participants to the World Conference of Science Journalists in Seoul that experts are still trying to understand the virus that still has no cure and no vaccine.

“It looks like influenza...the structure is simple, but mutation can occur,” Hong said, adding that foreign experts have said that “it is likely that is has not mu-

tated yet,” but if it would occur, “it is not significant.”The spread of the virus from a 68-year-old man

from Saudi Arabia in the hospitals in South Korea was caused by many patients sharing hospital rooms, said Sung-han Kim, associate professor of the Department of Infectious Diseases at Asan Medical Center.

The emergency room is crowded, there is limited hospital human resources and there is a culture of family members visiting their hospitalized relatives, he said.

He added that, in hospital, precaution is necessary, like in the washing of hands.

MERS shuts down schools in South Korea

By Rene Acosta

FIVE members of a break-away communist group were killed on Tuesday in

a gun battle with policemen in Pampanga.

By Joel R. San Juan

JUSTICE Secretary Leila de Lima on Tuesday gave the National Bureau of Investigation-National Prosecution Service Special Investigation Team

(NBI-NPS SIT) one more month to wrap up its probe cov-ering the second part of the January 25 Mamasapano, Maguindanao, gun battle that resulted in the killing of 44 police commandos.

De Lima told reporters that she has approved the re-quest of NBI investigators to extend the deadline to file the second batch of cases in connection with Mamasa-pano incident.

The second part of the investigation is focused on deaths of the nine 84th Special Action Company (SAC) Seaborne com-mandos of the National Police-Special Action Force (SAF) at Barangay Pidsandawan, four members of the Moro Islamic Liberation Front (MILF) and five civilians.

The justice secretary said she has been receiving regular updates from the NBI-NPS SIT and that it has yet to conclude its investigation.

“I gave the team a one-month extension to complete its in-vestigation and submit its probe and submit its Report-Part II,” de Lima told reporters in a text message.

The NBI-NPS SIT earlier recommended the filing of criminal charges against 90 members of the MILF, Bangsamoro Islamic Freedom Fighters and private armed groups believed to be re-sponsible for the killing of 35 members of the elite National Police-SAF on January 25.

The task force’s report was limited to the killing of 35 mem-bers of the 55th SAC during the shootout.

The 84th SAC is the unit that attacked and killed wanted Malaysian bomb maker and Jema’ah Islamiyah leader Zulkifli bin Hir, while the 55th SAC is the blocking force to enable the main unit to exit from the target area.

De Lima extends DOJ’sMamasapano massacre probe

Palace Communications Secre-tary Herminio B. Coloma Jr. told reporters that President Aquino convened the Cabinet to “review government’s performance vis-a-vis the national budget for the first quarter of 2015.” This developed as Budget Sec-retary Florencio B. Abad clarified the “two-tier budgeting” that the Aquino administration is set to adopt for implementation to reverse government underspending. “The first tier involves a review of ongoing expenditures,” Abad said in a text message, adding “the second tier is for new and/or expan-sion of projects.” The budget chief explained that what he proposed for immediate adoption by the Cabinet is to revert to the previous policy where the na-tional budget expires after “one year.” “My proposal is to return to one-year lapsing of the budget,” Abad said. This means, he added that “all appropriations would have to be ob-ligated within the year, otherwise, the appropriation lapses.”

The Cabinet meeting scheduled to start at 10 a.m. on Tuesday at the Aguinaldo State Dining Hall was still ongoing at press time.

Review AMiD continued budgetary un-derspending, economic managers of the Aquino administration on Monday urged Congress to review the country’s existing procurement law to address bottlenecks in dis-bursing public funds. Finance Secretary Cesar V. Puri-sima and National Economic Plan-ning Secretary Arsenio M. Balisa-can, during meeting of the Joint Congressional Oversight Commit-tee on Public Expenditures, said Congress should amend and sim-plify the Republic Act (RA) 9184, also known as the Government Procurement Act. “We need to simplify processes that we can drum up public invest-ment without sacrificing account-ability and transparency. We [the Development Budget Coordination Committee] can come up with a new

BusinessMirror news@businessmirror.com.ph A4

Economybriefs

pal’s mabuhay lounge to undeRgo face-liftThe domestic lounge of Philippine Airlines at the Ninoy Aquino International Airport (Naia) Terminal 2 will undergo a facelift starting this month. The renovation of the legacy carrier’s domestic Mabuhay Lounge will run from June 15 to August 15. “The enhancement of the lounge, which will result in a new look and feel, is part of the flag carrier’s over-all efforts to serve its passengers better,” the airline said in a statement. While the domestic lounge is being renovated, Mabuhay Miles elite, Premier elite, Million Milers, Business Class and Premium economy, PAL domestic passengers shall be extended preflight refreshment vouchers upon check-in. The vouchers may used in specified outlets between Naia Gates 5 and 6 of Terminal 2. Lorenz S. Marasigan

poea cancels license of manning agency oveR placement feeThe license of a local manning agency has been ordered canceled by the Philippine Overseas employment Administration (POeA) for collecting placement fees from two seafarers.

Administrator hans Leo Cacdac identified the company as Mid-South Ship and Crew Management Inc., which is now barred from recruitment and deployment of overseas Filipino workers.

he said there is total prohibition on the charging or collecting placement fees from seafarers. Any amount charged and collected by the said agency is illegal and deemed excessive.

Section 2 (a) of Rule II, Part V of the 2003 POeA Rules and Regulations Governing the Recruitment and employment of Seafarers prohibits manning agencies from charging, imposing, or accepting directly or indirectly, any amount of money, goods or services, or any fee or bond for any purpose from an applicant seafarer.

The cancellation was based on the complaints of two jobseekers, who both alleged that they applied with the agency and were assured employment as fishermen for a Taiwan-based fishing vessel.

The Filipino workers claimed that they paid placement fee of P30,000 and P60,000, but they were not issued corresponding official receipts. PNA

dbm, dpwh test online bidding pRocessThe Department of Budget and Management (DBM), through a tie-up with the Department of Public Works and highways (DPWh), is in the final stages of piloting an online-bidding process that will give contractors and bidders more opportunities to join the bidding for government projects.

Online bidding will allow bidders and contractors to submit their documents through the Internet, benefiting those who are based in the provinces, Budget Undersecretary Richard Moya said on Tuesday.

The process can be accessed through philjeps.gov.ph.

“They are just pilot-testing it in DPWh. If it works in the DPWh, we will mainstream it across all philjeps,” he said, adding that the department will complete the tests this month.

Moya said the bidding has two stages: the submission of pertinent documents; and the submission of the financials.

“With this one, you preload all your documents digitally online so that when you join a bidding, all your feasibility documents have already been verified. This would reduce the time,” he said.

he, however, noted that contractors cannot simply make a bid, they have to register and pay a fee of P5,000, which covers a year. PNA

CANADA announced on Tues-day that it is providing an additional C$1,500,000, or

about P54 million, in humanitar-ian assistance funding for people displaced and affected by conflict in Mindanao.

The funding, its embassy in Manila said, will be channeled to internation-al organizations already working in the area to address the humanitarian needs of thousands of internally dis-placed people (iDP) living in conflict-affected areas in Mindanao.

“One of the agreements an-nounced when Prime Minister Harper and President Aquino met in Ottawa last month was the com-mitment of additional funding to help those displaced by conflict in Zamboanga City and other parts of Mindanao,” Canadian Am-bassador to the Philippines Neil Reeder said.

The funds, the envoy added, will support the work of Canada’s expe-rienced partners “in meeting prior-ity humanitarian needs, including the enhancement of nutritional and emergency food status of displaced people, improve emergency shelters, support emergency preparedness ef-forts and protection services and to help restart lost livelihoods.”

Funding are as follows: international Committee of

the Red Cross-C$750,000 (P27 million)

international Organization for Migration-C$250,000 (P9 million)

Action Against Hunger-C$500,000 (P18 million)

“This additional funding dem-onstrates Canada’s continuing com-mitment to build on our strong ties with the Philippines,” Reeder said. Since last year, and including this announcement, Canada has allo-cated a total C$3.5 million in hu-manitarian funding to displaced populations in conflict-affected areas in Mindanao. PNA

The Coalition of Filipino Consumers (CFC) has branded the joint-venture agreement (JVA) between IBC-13 and R-II Builders-

Primestate Ventures Inc. as an “epic scam,” citing a Commission on Audit (COA) report on IBC-13 that the land valuation is way below the actual value of the 4.4- hectare prime property in Quezon City.

In a news statement, CFC Secretary-General Perfecto Jaime Tagalog said that, based on the average value of the land that was submitted by the state-owned auditing firm, the prop-erty bounded by Ayala heights subdivision and Capitol Golf Course could cost P17,000 from 2009 to 2011.

“The price per square meter of the property could be more than double the value that RII Builders pegged in the JVA. Lugi ang gobyerno and, obviously, pinagsamantahan ang gobyerno

sa kontratang ito. These real-estate developers raped the government,” Tagalog alleged.

The agreement set the price of the prime property at P9,999 per sq m when the deal was finalized on March 24, 2010. The group said there was also an attempt to conceal the result of the appraisal made by the General Appraisal Co. in 2000, which was more than double the IBC-13 agreed for the joint venture deal with RII Builders.

Under the deal, RPI-PVI will construct condo-minium buildings and will profit from selling the units. In return, the real-estate developer will pay IBC-13 a total P728 million within two years from the signing of the JVA

Tagalog is also puzzled why Senate President Franklin M. Drilon and other lawmakers have sud-denly kept mum on the issue when he was the first to question the deal in the Senate.

“Nakakapagtaka ang pananahimik ng ating mga mambabatas. Si Drilon mismo ay tila wala ng interest. Nanawagan kami kay Sen. Grace Poe at Chiz escudero na imbestigahan ang JVA na ito. Kailanganang malaman ng taong bayan ang totoo,” Tagalog stressed.

he also called on the Office of the Ombuds-man to fastrack the filing of the criminal complaint against officials of the IBC-13 and R-II Builders Inc.-Primestate Ventures Inc. filed by the Ombuds-man’s Field Investigation Office (FIO).

“Mabagal ang takbo ng hustisya. Mukhang may naglalaro sa usapin na ito at marami ang nakikipaglaro,” Tagalog pointed out.

Upon investigation, the FIO found that the ex-ecution of the JVA allegedly caused undue injury to the government in the amount of P254,843,401 representing the difference between the COA

valuation and the JVA valuation of the 36,401 sq m property, which purportedly gave unwarranted benefits to R-II Primestate.

The FIO alleged that the deal between IBC-13 and R II Primestate is grossly disadvantageous to the government as well as invalid and illegal for failure to follow the guidelines and procedures for entering into JVAs between the government and private entities (JV guidelines), with evident bad faith and manifest partiality in favor of R-II Primestate and to the detriment of IBC-13.

It cited respondents’ collective acts in approv-ing the JVA allegedly in haste, with misrepresen-tations in the clauses, and over the reservations made by the Presidential Commission on Good Government, Office of the Government Corporate Counsel, and Office of the Solicitor General which noted the deficiencies in the JVA.

By Lorenz S. Marasigan

The youngest overhead railway system in the Philippines has yet to achieve what its older siblings have already attained—

that thing called congestion—but the govern-ment is now moving to improve its services with the line’s extension to Antipolo. Aside from that, the government is also planning to increase the capacity of the Light Rail Transit (LRT) Line 2 in the next couple of years in anticipation of the growing demand for connectivity around Metro Manila. honorito D. Chaneco, the chief of the LRT Au-thority (LRTA), said this is the plan of the govern-ment, at least on the medium term, in order to help abate the growing traffic congestion in the capital and its nearby cities. On Tuesday the eastward extension initiative for the train line kicked-off with a simple ground-breaking ceremony in the morning. executives from both the government and the private sector said they are excited with the completion of this project. “We will all reap the benefits of our hard work when we witness the first set of trains rolling down the tracks of this eastern extension by the third quarter of 2017. With its completion, residents of Rizal will be able to enjoy the experience of a full comfortable eastbound travel as we bring schools, work places and other amenities closer to their homes,” Transportation Undersecretary for Project Implementation Julianito G. Bucayan Jr. said in his speech during the ceremonies in Pasig City. The construction arm of DMCI holdings Inc.

was tapped as the contractor for the building of the viaducts that will run up to Antipolo City. The deal was priced at P2.27 billion. The whole project has a total cost of P9.5 billion. It also includes the electromechanical requirements of the system, which has a price tag of about P5 billion. “We can delay its bidding because the vital part of this project is the construction of the viaducts. But, there will be no more delays from the government’s side. We can still procure the electromechanical system requirements within the year,” Chaneco said in an interview. The Masinag extension covers the construc-tion of a 4-kilometer elevated viaduct from San-tolan, Pasig City, to Masinag, Antipolo City. Two additional stations will be built: the emerald Station in Cainta, Rizal, and the Masinag Station at the Masinag Junction in Antipolo City. The extension of the country’s youngest over-head railway system is expected to cater to an ad-ditional 75,000 daily passengers living in densely populated areas of Rizal. Conservatively, the gov-ernment targets a to commercially operate the eastward extension by the third quarter of 2017. Aside from the construction of the eastward extension of the line, two other major contracts are up for bidding to further improve and mod-ernize the LRT 2 system’s services. An operations and maintenance contract is al-ready in the procurement process, and is intended to provide riders with customer-oriented services and well-maintained facilities that enhance the overall passenger experience.

Wednesday, June 10, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

LRT 2 aim to avoid ‘congestion trap’

position [on RA 9184]...because there has been a problem [with the law],” Balisacan said. For Purisima it is more important that bottlenecks in spending be ad-dressed so the country can at least catch up with other Asean countries in terms of infrastructure spending. “This may be a good time for Congress to revisit the entire pro-curement process because it’s really intended to slow down the process,” Purisima added. “The fact our agencies have diffi-culty spending [the budget], i think, is not a reason to reduce the space

available for them to spend. The way to solve the problem is to ad-dress their capacity or processes in spending,” he said. Disbursement by the national government rose by only 4 percent, or P21.5 billion, to a total of P504.04 billion in the first quarter of 2015. The total spending as of end-March was also 13 percent short of the P582.2-billion target. “Bottlenecks in the procurement process have resulted in slow pace of project implementation, with government agencies taking an average of six months to roll out

projects compared to the one or two months needed by the private sector,” Purisima said. Meanwhile, Senate Finance Committee Chairman Sen. Francis Escudero said that bottlenecks in government spending could be re-solved without amending the pro-curement law, saying “the Govern-ment Procurement Policy Board, which is chaired by the Department of Budget and Management secre-tary has plenary powers to issue rules and regulations to clarify certain provisions of procurement law.” With Jovee Marie N. dela Cruz

Cabinet moves to reverse underspending

Malacañang officials tackled at a marathon cabinet meeting on Tuesday measures

to redress the underspending that hounded government projects last year, and which is partly blamed for the lower-than-expected gross domestic product (gDP) growth for the full year 2014 and the first quarter of 2015.

R-II Builders, IBC-13 land deal an ‘epic scam’–groupMindanao gets additional P54-M humanitarian aid from Canada

TransporTaTion Undersecretary Julanito G. Bucayan Jr. (center), Light rail Transit authority administrator Honorito Chaneco (right) and Japan international Cooperation agency Chief representative noriake niwa lead other government officials during the groundbreaking ceremony that kicked off the construction of the Light railway Transit 2 extension project. The p9.5-billion project covers the construction of an additional 4.2-kilometer elevated viaduct from the current end station in santolan, pasig City, to the junction of Marcos and sumulong. Two additional stations will be built, namely, the Emerald station in Cainta, rizal, and the Masinag station at the Masinag junction in antipolo City. KeVIn De LA CRUz

fta deal The philippine Exporters Conferation inc. (philexport) and philippine Trade Training Center (pTTC) strengthen their partnership in promoting awareness and understanding on the utilization of free-trade agreements among exporters with the signing of a memorandum of understanding. photo shows philexport president sergio ortiz-Luis Jr. (center) and pTTC acting Executive Director nestor palabyab (second from left) during the signing event. Joining them are (from left) pTTC information officer Leilani arjonillo and philexport Managers Elsa Valenzuela and Gigi Digal. PnA

By Butch Fernandez

THE Power Sector Assets and Liabilities Management Corp. (PSALM) continues

to pursue the sale of government assets amid the suspension of the state firm’s president. PSALM is the agency mandated by Republic Act (RA) 9136, or the Electric Power Industry Reform Act of 2001, to handle the sale of the remaining state power assets and financial obligations of the National Power Corp. The power facilities that are up for sale this year include the independent power producer administrator bulk energy contracts of up to 200 megawatts (MW) for the Unified Leyte power plant; the 210-MW Mindanao coal-fired power plant in Misamis Oriental; Power Barges 101 to 103 (96 MW), PB 104 (32 MW); and the decommissioned Sucat power plant. For 2016 PSALM intends to privatize the 727-MW Caliraya-Botocan-Kalayaan hydropower facility. It has set the indicative turnover of the administrator of the CBK contracts by the first semester of 2017. In 2017 PSALM wants to privatize the Agus-Pulangi

hydro complex. As of end-2014 proceeds from the privatization efforts of PSALM stood at $8.529 billion. Of which, $1.298 billion was used for debt repayment, $4.899 billion for regular debt service, $2.22 billion for build-operate-transfer lease obligations and $108 million for other privatization-related expenses. So far, PSALM privatized the 153.10-MW Naga power plant, the 218-MW and Angat hydropower plant, the 200-MW Unified Leyte geothermal strips of energy, the 92.52-MW Mount Apo 1 and 2 contracts. “The privatization efforts of PSALM will continue because the OIC [officer in charge] has the same powers as the PSALM president. There will be no disruption,” said Energy Secretary Carlos Jericho L. Petilla, who is also a member of the PSALM Board. Ledesma was placed on a 90-day suspension by the Board on allegations of corruption, abuse of discretion, among others. He was appointed by President Aquino in September 2010. Lourdes S. Alzona, PSALM Vice President for Finance, is PSALM’s officer in charge. Lenie Lectura

briefsvillar pushes halal industry bill

Sen. Cynthia Villar on Tuesday pushed for the passage of a bill allowing the Philippines to compete in the booming Halal industry now worth $1.6 trillion.

Villar submitted on the floor Senate Bill 2831 under committee report no. 175 seeking to institute the Philippine Halal export Development and Promotion Program in preparation for the forthcoming Asean economic integration.

“The regional economic integration will signal the expansion of Halal trade all over Asean countries. We must be ready to be at the forefront of that,” Villar said in her sponsorship speech on the bill.

“Without a halal export legal framework in place, our products become susceptible to doubts from receiving countries. Some “fly-by-night” certifying bodies may issue certification without duly inspecting the goods,” she added.

Halal means permitted or lawful foods allowed to be eaten according to the Islamic Sharia law. Villar, chairman of the Senate Committee on Agriculture and Food, said the government must act proactively to ensure that products from the Philippines are at par with international Halal standards to earn the confidence and goodwill of trade partners. PNA

nreb eyes 2-gwh solar-target capacity by 2030The national Renewable energy Board (nReB) is considering a 2- gigawatthour (GWh) solar-target capacity by 2030, according to its chairman, Pete Maniego Jr.

”The 2-GWh solar-target capacity is being considered until 2030—this is for the national Renewable energy Program,” Maniego told reporters.

Philippine Solar Power Alliance President Tetchi Capellan said in a recent forum the organization was asked by the nReB to submit a target capacity for the next three years.

She noted the 2-GWh solar target consists of 1 GWh for ground-mounted projects and 1 GWh for rooftop projects.

Capellan said the basis for the target capacity are the service contract applications currently totalling 1.3 GWh.

However, she stressed the industry still has to address the solar panels’ interconnection to the grid. Capellan said the target will further increase the embedded generation of the country.

earlier, the energy Regulatory Commission has approved the solar feed-in-tariff target capacity at 500 megawatts. PNA

After the approval of the two measures at the bicameral commit-tees, Speaker Feliciano Belmonte Jr., in an interview with reporters, said the measure amending the Cabotage law and Philippine Fair Competition Act will be ratified in the both chambers on Wednesday and will be transmitted to Presi-dent Aquino for signature. “Last night the bicameral com-mittee approved the proposed Phil-ippine Fair Competition Act as the differences between the Senate and the House versions [were] finally resolved.... And I considered the [approval] as a major accomplish-

ment of both Houses because, vir-tually since 1987, all Congresses have tried to pass it, but failed and now, finally fortunately, we passed it,” Belmonte said. House Committee on Trade and Industry Vice Chairman and Liberal Party Rep. Anthony del Rosario of Davao del Norte, one of the authors of the bill, said the proposed Fair Competition Act aims to minimize, if not totally eradicate, unfair com-petition, monopolies and cartels. The bicam-approved version of the bill also proposes to create the Philippine Competition Commission (PCC) that will prosecute those en-

By Lenie Lectura

THE Lopez-led First Gen Corp. expressed apprehension over the possibility of building a

nuclear power plant in the country, citing excessive cost and safety issues. First Gen officials present during the company’s recent annual meeting were asked by one of its shareholders if the company was open to it. The officials said First Gen Chair-man Fredrico Lopez has received many proposals for it to build a nuclear power plant, but cited the challenges that it would have to face. First, he cited the cost. “The cost converting [the Bataan Nuclear Power Plant (BNPP)]… is even more expensive than building a new plant,” Lopez said. Strong opposition from environ-mental groups and other sectors should also be seriously considered. “The is-sue also goes beyond if the Philippines can make nuclear power. There is a very strong environmental sentiment against it so it’s not an easy thing go through, as well,” Lopez added. Besides, the First Gen official pointed out, there are few resources to sustain the operation of a nuclear- power facility. “There are so few nuclear plants built in the world. The number of stu-dents getting into that field is actually very little. For those in the field already, I think more than half of them are ac-tually retiring,” Lopez said. Apart from the construction cost, another important factor to be con-

sidered is the cost to actually operate a nuclear power plant. “The chain of supply is only pro-duced by few suppliers in the world. For instance, for the containment vessel, there are only two companies that do that. So, the cost will be affected. Many nuclear plants around the world always end up with cost overruns, 50 percent to 100 percent more than originally estimated,” Lopez explained. Talks on BNPP’s revival started last year, when some sectors cited that the BNPP, which has a 600-megawatt ca-pacity, could help ease the country’s power-supply problems. The $2.3-billion nuclear power plant was built between 1976 and 1984 on a 357-hectare government reserva-tion at Napot Point in Morong. The property where the BNPP is located is owned by the Department of Finance. Energy Secretary Carlos Jericho L. Petilla had said that it will take $400 million to $600 million to re-vive the facility. Petilla said the decision whether to revive the BNPP is not his call. In-stead, he said, a nuclear regulatory body should be formed to study the proposal. “I don’t want to decide on it. We must have a nuclear regulatory body to decide on it because this is a very sensitive issue,” Petilla said. Among others, the body will address the safety concerns raised by various sectors that are against the revival of the power facility. “No one will sell uranium to us if we have no nuclear body. This is a big task,” added the energy chief.

news@businessmirror.com.ph Wednesday, June 10, 2015 A5BusinessMirrorEconomy

First Gen’s Lopez apprehensive about nuclear-power proposals

gaged in unfair and deceptive trade practices and other such practices with the purpose of preventing, re-stricting, or distorting competition, del Rosario said. Moreover, Belmonte also said the measure amending the Cabotage law has also hurdled the bicam commit-tee. The amendments seek to lib-eralize the entry of foreign vessels between ports in the country.

other billsMEANWHILE, Belmonte said sev-eral measures, including the Resolu-tion of Both Houses No. 1 (RBH 1) amending the economic provisions of the Constitution, the proposed Tax Incentives Management and Transparency Act (Timta) and anti-political dynasty bill, are set to be passed today or before the Congress’s sine die adjournment on June 12. The House Speaker said “his best effort” is still needed to get the needed quorum and to pass his economic Cha-cha in the House of Representatives. Congress will take a sine die ad-journment on June 12 to July 26. The amendments to the Charter will be approved through separate votings by both Chambers, with a

three-fourths vote required from them. RBH 1 seeks the amendments to certain economic provisions by inserting the phrase “unless other-wise provided by law” particularly on Articles 12, 14 and 16 of the Constitution. “After the approval at the House we will immediately transmit it [RBH 1] to the Senate for its own delibera-tions…and, as per Senate President Franklin M. Drilon, they are commit-ted to approving it,” Belmonte said. The proposed Timta, authored by Liberal Party Rep. Maria Leonor Gero-na-Robredo of Camarines Sur, mean-while, seeks to promote transparency and accountability in the grant and administration of tax incentives. On the other hand, the proposed law prohibiting the establishment of political dynasties was principally authored by Liberal Party Rep. Edgar Erice of Caloocan and National Unity Party Rep. Fredenil Castro of Capiz, chairman of the House committee on Suffrage and Electoral Reforms. The Constitution said the state shall guarantee equal access to op-portunities for public service and prohibit political dynasties, as may be defined by law.

House seen to ratify revision of Cabotage law, pass fair competition measure today

By Jovee Marie N. dela Cruz

Two congressional bicameral committees have already approved the proposed

amendments to the Cabotage law and proposed Philippine Fair Competition Act, which local and foreign business groups have supported.

PSALM focuses on mandate amid Ledesma’s ‘suspension’

By Catherine N. Pillas

THE Bases Conversion and Development Author-ity (BCDA) is scouting

for a joint-venture partner to develop the first phase of the Clark Green City (CGC), and has opened for bidding the 55-per-cent stake of the Joint Venture Corp. (JVC) that will spearhead the development. The state-run firm held its pre-bid conference on Tuesday for the majority equity stake, and was attended by 16 of the country’s largest land develop-ers, namely, Ayala Land Inc., Century Properties Inc., Daichi Properties Inc., ESCA Inc., Fed-eral Land Inc., Filinvest Land Inc., First Philippines Industrial Park, Hitachi Asia, Jones Lang LaSalle Inc., Megaworld Corp., MGS Construction Inc., MTD Phils. Inc., Nuevo Centro Inc., ProdigyAE Inc., Rockwell Land Corp., and Sudeco. BCDA President and CEO Ar-nel Paciano D. Casanova reiter-ated during the conference that the minimum bid for the stake remains at P160 million, which was lowered from P500 million after the first bidding failed. The P2.5-billion capitaliza-tion and investment require-ment was also waived, as ear-lier reported. “We restudied the market and we have simplified everything now. We’ll form a company that will have the development rights, then we sell the 55 percent. From then on, we’ll just make the deci-sion on the investment over the years. We need flexibility,” Casa-nova said. The P160-million minimum bid is based on the appraised value of the land, which is at P100 per square meter. The JVC will have the devel-opment and usufructuary rights over the 288-hectare property, representing the first phase of the Clark Green City, and will have a corporate life of 50 years, renewable for another 50 years. The company will also have the

right to develop, market, manage and lease the property to third parties or to the public with a leasehold period of 50 years, re-newable for another 25. The JVC should start devel-opment works on the property within two years of signing the contract. To be considered as an eligible bidder, the developer must have completed a mixed-use develop-ment with a land area of at least 50 hectares or having a gross floor area of at least 2 million square meters. Alternatively, the development must have been valued not lower than P5 billion. The bidder or the member, in the case of a consortium, should have a cash balance or credit line of at least P5 billion. The deadline for the submis-sion of eligibility documents and final proposals is on July 3. The BCDA is eyeing to sign the contract with a joint-venture partner by September of this year.

infrastructure development ongoingMEANWHILE, Casanova as-sured that the needed infrastruc-ture to gain access into the city is under way. The Clark-Bamban-Capas Road and the MacArthur-CGC are two road projects being un-dertaken by the BCDA with the Department of Public works and Highway. Another BCDA infrastructure undertaking is the Clark Rail Transit System, which will ex-tend from Tutuban to CGC. The bidding for the operator-partner will start this second quarter, Casanova said. Casanova said consortiums have already expressed interest in the project during his visit to Japan with President Aquino, said, but declined to specify the firms. “There are at least three par-ties that have expressed interest. We want them to do their studies first before we reveal who they are, one of them is Japanese and others are regional players,” Casa-nova said.

BCDA embarks on search for JV partner to develop first phase of Clark Green City

win the jackpot Players line up at a Philippine Charity Sweepstakes Office (PCSO) lotto outlet in Las Piñas City to buy tickets for the Monday and Wednesday draw of the Grand Lotto 6/55, with estimated jackpot prize of P212 million. The highest Grand Lotto 6/55 jackpot ever won was P741 million in 2010 by a balikbayan who bought a ticket in Subic. JOSEPH MUEGO

Wednesday, June 10, 2015

OpinionBusinessMirrorA6

China’s next-level hack editorial

CHINESE hackers have become such a persistent presence on American computer networks—both public and private—that sometimes their med-dling slips by with little notice. Not this time.

Late last year intruders stole the records of some 4 million US government workers from a federal data center. The attack, disclosed last week and attrib-uted to Chinese hackers, was linked to previous breaches at health insurers Anthem Inc. and Premera Blue Cross. And it included the records of workers who had applied for security clearances.

The implications are ominous. Embarrassing information dredged up in a background check could be used for blackmail. Red flags in a security-clearance application—dependencies, emotional problems, financial woes—are just the sort of thing another government might look for when recruiting spies. And social engineering attacks, such as spear phishing, are a lot easier when hack-ers have a wealth of personal material to work with.

And it’s not just individuals at risk. Applying big-data tools to such a vast trove might yield insights into US intelligence and military strategy, expose a revealing Web of government relationships, or find unexpected correlations that Chinese analysts could exploit. In short: This is bad. The US would be within its rights to respond aggressively.

It shouldn’t.Restraint, though unsatisfying, is the prudent response. The US-China re-

lationship is complicated but strategically important. Even as the US resists Chinese incursions into the South China Sea, it needs China’s cooperation in Afghanistan and elsewhere. And the economies of both countries are inex-tricably linked. A direct reprisal for this attack—whether economic or elec-tronic—would intensify many risks without advancing many strategic goals.

So what can and should US officials do? For one, they can warn their Chi-nese counterparts that the US has a lot of tools at its disposal, digital and otherwise, if these attacks continue. More diplomatically—and there are high-level talks scheduled for later this month—they should emphasize the benefits of a more trusting relationship between the two countries, including easier Chinese investment in US markets and increased economic growth. It could also allow for more collaboration on everything from counterterrorism to climate change to space travel.

Within the US, this incident should serve as a wake-up call about cybersecu-rity. Smarter approaches to government database management—modeled on the banking industry, say—would help reduce the harm of intrusions when they inevitably occur. The Homeland Security Department should boost its coopera-tion with private companies (it only got around to opening a Silicon Valley office this year) in trying to protect civilian agencies. And serious cybersecurity legis-lation is long overdue. China isn’t the only country interested in American files, and federal workers deserve more than credit monitoring from their overseers.

Nation-states have always engaged in espionage, of course, and always will, whether they use a dead drop or a network virus. In cyberspace, as in real life, it’s a game of managing risks—and avoiding overreaction at all costs.

Bloomberg editorial

How your retirement pension is computed

THERE have been some online discussions recently about how Social Security System (SSS) retirement pensions are computed after it became a topic in a television program.

It couldn’t be avoided that SSS pensioners compare the amount of their pensions, and often these discussions lead to questions about how their retirement pensions were computed and what the difference is between someone who contributes minimally over someone who pays based on the maximum salary credit. Let me take this opportunity to illustrate theoretically the cases of two retirees, Mr. A and Mr. B, as follows. But let me cite first some relevant policies.

All About Social SecuritySusie G. Bugante

The SSS law provides for three ways to compute pensions and the highest resulting amount is the one granted to the claimant. The first method is P300 plus 20 percent of the average Monthly Salary Credit (MSC) plus 2 percent of the average MSC for each year in excess of 10

years. The second method is 40 per-cent of the average MSC. The third method: Minimum guaranteed pen-sion of P1,200, if credited years of service (CYS) is greater than 10 years but less 20 years, or P2,400 if CYS is at least 20 years.

As can be observed from these

methods of computing the pension, the critical factor is the MSC: The higher the MSC the higher will be the pension amount.

The monthly contribution of a member is based on actual com-pensation for an employed member or the declared earnings for a self-employed or voluntary or overseas Filipino worker (OFW) member. Changes in the MSC are governed by policies to avoid antiselection such as undue jacking up of contri-butions prior to a contingency such as retirement.

Based on the SSS Circular 2015-07, a self-employed or voluntary member (including an OFW and non-working spouse), who is 55 years old and above, can only increase his or her MSC only once in a given calendar year and by one salary bracket only from the last posted MSC, except if:

n He or she is changing member-ship type from employed or self- em-ployed to voluntary or OFW for the first time; and

n There is a higher maximum MSC under a new schedule of

contributions, provided that he or she was paying at the maximum MSC under the immediately preced-ing schedule of contributions. Any changes thereafter will be governed by existing rules.

Going back to Mr. A and Mr. B, if both are employed members, the basis of their contributions and MSC are their actual compensations so it is not possible for either of them to just choose any MSC or change to a higher MSC. It’s a different story if Mr. A was employed and Mr. B was self-employed or a voluntarily paying member. The matrix below shows the differences in their com-puted benefits.

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

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

Mr. A Mr. B

Difference of their Contributions: P584,100

CONCLUSION: For Mr. B to be able to pay the highest contribution by age 55 he should have increased his contributions gradually starting from age 26.

MONTHLY PENSION: P9,900 MONTHLY PENSION: P1,200

Began paying SSS contribution at 30 years old

Pays the maximum monthly contribution: P1,760 a month for 30 years

Total contribution for 30 YEARS (until he retires at 60) P633,600

Total contribution for 30 years (until he retires at 60)P49,500

Began paying SSS contribution at 30 years old

Pays the minimum monthly contribution of P110 a month for 25 years

THEN, he increases his monthly contribution to P1,760 a month for 60 months or 5 years before he turns 60

This is NOT ALLOWED. A member who is 55 years old and above, can in-crease his/her MSC only once in a given calendar year and by one salary bracket only from the last posted MSC.

Based on SSS Circular No. 2015-07, Mr. B can only increase contribution to P165 at age 55; P220 at age 56; P275 at age 57; P330 at age 58; and P385 at age 59.

Other Benefits: 1. In case the member dies, the full pension will be transferred to his/her legal spouse. In case he or she has minor or dependent children maximum of five starting from the youngest, each child will receive P250 or 10% of the full pension, whichever is higher. 2. In case the member’s spouse is also dead and there are no minor or dependent children, his or her secondary or designated beneficiaries will be given a lump sum benefit equivalent to the balance of the 5-year guaranteed pensions in case the member dies before the 5-year guaranteed period had lapsed.

The example cited above should be analyzed not only in consideration of one’s retirement benefit but also under the whole range of benefits provided by SSS: sickness, maternity, death, disability and retirement. Using the given example where both Mr. A and Mr. B started paying SSS Contributions at the same time, the following are possible scenarios.

FROM PAYMENT OF FIRST Mr. A Mr. B CONTRIBUTION

After paying 36 monthly contributions Disability/Death Benefit Disability/Death Benefit Pension Amount: P9,900 Pension Amount: P1,000 Salary Loan: Salary Loan: Loanable Amount: P16,000 Loanable Amount : P1,000After paying 72 monthly contributions Salary Loan: Salary Loan: Loanable Amount: P32,000 Loanable Amount: P2,000After paying 3 monthly contributions Sickness Benefit Sickness Benefitwithin a 12 month period before Daily Cash Sickness Allowance: Daily Cash Sickness Allowance:semester of sickness P479.99 P29.99

Wednesday, June 10, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

BRICS hit a wall

FOURTEEN years ago, Goldman Sachs presented a thesis that quickly gained traction among investors and policy- makers: Brazil, Russia, India and China (BRIC), the bank

claimed, would increasingly drive global growth, filling a void left by the West. Today the opposite case seems far more plausible. The so-called BRIC nations are now threatening to drag down the rest of the world.

China’s exports declined in May for the third straight month, while imports slumped for the sev-enth month in a row. Asia’s biggest economy, in other words, is being hit in two directions: weak demand abroad and a sluggish economy at home. Not to mention the epic stock bubble that is sucking oxygen from its financial system.

It’s not just China, though, as Gabriel Stein of Oxford Economics recently explained to me in Tokyo. A new report from Oxford’s research team points out that imports are currently declining in Brazil, India and especially Russia. The BRICS are responsible for a drop in annual world trade by about 1.3 percentage

points, the most pronounced decel-eration since the 2008-2009 global financial crisis.

And these trends extend far be-yond the four emerging giants. For the 13 non-BRIC developing econo-mies that Oxford tracks, imports of goods grew by only about 1.5 percent in the first quarter year-over-year (the long-term average for these countries has been about 8 percent). And what’s most worrying is that this slowdown is taking place even before the Federal Reserve (the Fed) begins its announced interest rate hikes. (Emerging-market stocks fell for an 11th straight day on June 7, the longest such streak in 24 years, amid concerns about Fed policy.)

Emerging nations have certainly hit a wall before, including South-east Asia in 1997, Russia a year lat-er and Argentina more times than we can count. But there are good reasons to believe today’s threat could be far more severe and last-ing, including emerging markets’ higher debt levels and relatively modest growth in advanced econo-mies. Even with the recent pickup in job creation, today’s 2.7-percent US growth is about half the pace of the late 1990s, while the euro zone’s 1-percent pace is only a third of its output back then. And, while Japan’s economy expanded 3.9 percent in the first quarter, the 30-percent devaluation of the yen is dampen-ing growth prospects across Asia.

The stakes are also higher now than ever before, because emerg-ing economies are more central to the global economy. In 1999 they accounted for roughly 23 percent of world gross domestic product (GDP) and 38 percent on a purchas-ing-power-parity basis. Today those shares are 35 percent and over 50 percent, respectively.

The BRICS alone account for about 20 percent of world GDP, not much different than America’s 24 percent in 2007, just before the global crisis. Meanwhile, devel-oped nations are more financially

exposed to emerging markets than ever before. Last December the Bank for International Settlements said emerging markets have accumu-lated debts in US currency totaling almost $6 trillion.

And China is a unique wildcard in global markets. Even for the world’s second-biggest economy, China punches above its weight. Its slow-down has already caused a drop in global commodity prices; advanced economies (Australia) and develop-ing ones (Brazil and Russia) have been suffering as a result.

China’s huge stock rally is an-other reason for worry. “It still boils down to a giant casino,” Stein said. “I’m still very pessimistic.” But in-vestors still want to ride China’s stock market boom while they can.

On Monday they pushed the Shanghai Composite Index to its highest close since January 2008 (its now up 153 percent in 12 months), despite bad news on Chinese trade on June 7. Shanghai’s rally may have a ways to go before its inevitable correction.

Of course, the bigger the bub-ble, the greater the fallout. And as the analysts at Oxford remind us, the fallout won’t just be limited to China. The dream of the BRICS in-creasingly seems like it might turn out to be a nightmare.

By Michael Parr | The Philadelphia Inquirer/TNS

WHEN the US Department of Energy (DOE) released a report last month championing the construction of larger, more-powerful wind turbines, the wind industry

unsurprisingly greeted the news with enthusiasm.

Birds endangeredby wind turbines

With an extension of the “hub height” of turbines to 360 feet, the chief executive of the American Wind Energy Association said, wind energy could expand to all 50 states.

Less ardent was the association’s response to scientists’ well-docu-mented concerns about the half-million birds that die each year from collisions with existing turbines: Some migrating birds, a spokesman said, fly too high to be harmed by rotor blades.

Indeed. Some birds do fly very high. But far more travel at the very altitudes that would put them at greatest risk of colliding with the taller turbines. The risk is especially high during spring and fall, when migrating birds take to the skies in billions, many traveling vast dis-tances between their wintering and breeding grounds.

A new report last month from the US Fish and Wildlife Service calls into question the wind industry’s asser-tion that birds fly well above wind turbines’ rotor blades. Using radar, researchers examined fall migration at two locations in Michigan. They found that the greatest density of birds and bats migrating at night occurred from 300 feet to 500 feet above ground. That’s almost directly at hub height for the new generation of giant turbines.

Birds and bats “don’t have fixed lanes up there in the sky,” says Jeff Gosse, regional energy coordinator for the US Fish and Wildlife Service in Bloomington, Minnesota, and the report’s principal investigator. For instance, during poor weather, birds tend to fly lower. “As condi-tions change, they will change their altitude also. As the report indicates, many birds and bats are flying within the current rotor-swept zone.”

Before we rush to build thousands of turbines taller than many sky-scrapers, with blade tips that often spin in excess of 100 miles per hour, we should pause to examine what we already know about turbines’ effect on wildlife. Concerns about birds—and bats, which turbines also kill in large numbers—have not gone unnoticed. (The DOE report euphe-mistically acknowledges the need to address “additional interactions with wildlife.”)

Yet, we already know what these

“interactions” are. While exist-ing wind turbines kill hundreds of thousands of birds annually, the projections are even more sobering: Scientists have estimated that as the number of turbines increases, they could kill more than a million birds each year by 2030.

Meanwhile, an analysis recently released by the American Bird Con-servancy, based on federal data, found that more than 30,000 tur-bines have been installed in areas critical to the survival of federally protected birds—with an additional 50,000 turbines planned for con-struction in similar areas.

There are steps we can take. Build-ing wind turbines away from heav-ily traveled bird migration routes such as the Atlantic coastline or in the Great Lakes region would help to lessen fatal collisions. So would temporary shutdowns of turbines during peak migration periods in the spring and fall.

Keeping turbines away from core habitat where imperiled birds breed is also important. Another new study published by the journal Condor shows that greater prairie chickens—rare birds that gather each year for mating displays—are more likely to abandon these court-ship grounds when they are close to wind turbines.

These are all realistic goals. The Federal Aviation Administra-tion (FAA), for instance, already uses a database to make sure wind farms aren’t built in places where they would interfere with aircraft. The US Fish and Wildlife Service is well-equipped to do for birds and other wildlife what the FAA does for planes. The agency’s biologists know where birds occur, how they migrate, and which areas harbor protected species such as the Cali-fornia condor and whooping crane.

Developing renewable-energy sources is important. But our poli-cies treat birds and other wildlife as collateral damage in that quest. As the wind industry prepares to take turbines to new heights, the death toll for birds will only intensify.

Science tells us our current ap-proach to wind development is kill-ing hundreds of thousands of birds each year. The good news is that we also have the tools to do better.

BLOOMBERG VIEWWilliam Pesek

THE article by Aladdin Diega and Mary Grace Padin on the El Niño caught my interest because it has been more than a decade now that I am trying to get the government’s attention regarding the extreme problems on water that our coun-try experiences every year—too much rain and flooding during the rainy season and extreme drought and water scarcity during the dry season.

My name is Jesus (Jesse) Las Marias and I was a policy research-er for irrigation at the Philippine Senate when we crafted the Agri-culture and Fisheries Moderniza-tion Act. Needless to say, to come

up with a valid policy on irrigation, it was necessary for me to study water dynamics. It was then that I discovered practical technologies that could help mitigate extreme water problems.

For example, the solution to downstream flooding is also the same as the solution to seasonal drought? The solution to flooding in Bocaue is the same solution to the drying up of Angat Dam?

Did you also know that to produce more rice, the farmer needs only one-third of the current volume of water he uses and yet could harvest more than twice? I have delivered lectures on the subject during the World Water Day at the Depart-ment of Environment and Natural Resources in 2007 and twice more at the Department of Public Works and Highways before and after Ondoy. Surprisingly, government planners are very slow in catching up.

I am willing to share with you what I know and maybe we can influence government people see the light.

Manong Jess“Usapang Kaunlaran”

DZEC 1062 KHz

Broadcaster offers ideas to address El Niño

By John M. CrispTribune News Service

THREE recent events provide an occasion to consider our use of capital punishment in

the United States.On May 27 Nebraska became

the 19th state to abolish the death penalty.

This doesn’t signal a philosophical move to the left as much as indicate Nebraska’s frustration with the le-gal challenges and costs associated with capital punishment, as well as the difficulties that many states are having with obtaining the drugs re-quired for lethal injection.

Nebraska’s rejection of the death penalty coincides with the publica-tion of “Cruel and Unusual?,” the cover story of the current Atlantic. Writer Jeffrey Stern details the or-deal of Clayton Lockett, a rapist and murderer who was executed by the state of Oklahoma on April 29, 2014.

In every way, Lockett’s execution was botched—it’s hard to think of a better description. After an incompe-tent administration of an unproven execution drug, Lockett writhed on the gurney, struggling against the

restraints in an effort to free him-self. He rolled his head and tried to speak, illustrating how hard the hu-man body fights to stay alive.

While officials struggled with whether to halt the execution and attempt to revive Lockett, he finally died, an hour and a half after the execution began. Clearly, his death violated the Constitution.

Finally, on May 15 Dzhokhar Tsarnaev, the Boston Marathon bomber, was sentenced to death, sparking a discussion about which is the greater punishment, execution or life in prison for a 21-year-old, who could be facing 50 or 60 years in solitary confinement.

These three events portray just how complicated and confused our attitudes toward capital pun-ishment are; it’s hard to think of another American practice that is attended by more ambivalence, un-certainty and inconsistency than the death penalty.

Most Americans still support capital punishment, but according to the Pew Research Center support has fallen sharply in the last two decades, from 78 percent in favor in 1996 to 55 percent in 2013. Sup-

port falls even more when potential jurors are permitted to impose “life without parole.”

Ambiguities are inevitable. If James Holmes, the Aurora theater shooter currently being tried in Colo-rado, had committed his crime—which was as cruel and grisly as Tsar-naev’s—in any of 19 other American states, he wouldn’t be subject to the death penalty, at all.

Further, we’ve never figured out a way to administer the death penalty equitably among the rich and poor, among women and men and among the white and minori-ties. Worst of all, we’ve never dealt squarely with the death penalty’s irrevocability. That we have ex-ecuted innocent citizens is unde-niable, and as long as we continue to execute, we’ll continue to make irreparable mistakes. Sorting all this out seems impossible.

An anecdote exemplifies the confusion and ambiguity: A decade ago, I went to a local church on a drizzly Friday night to hear an ad-dress by Helen Prejean, the death penalty opponent whose book was made into the film Dead Man Walk-ing. I assumed that she would be

preaching to the choir, and mostly she was.

But as soon as Prejean finished describing her uncompromising op-position to the death penalty and invited questions, a young woman in the row directly behind me stood up and faced the audience. She dis-played a picture of her sister, who had been one of at least five victims of a serial killer, who was still alive on death row.

She described graphically the inexplicable torture that the killer used to murder her sister, administering an uncomfortable jolt to the convictions against the death penalty shared by many in the audience.

But there’s the dilemma in stark contrast: Every instinct compels us to give her sister’s killer precisely the treatment that he gave his victim. But we can’t give him what he truly deserves without compromising our most enlightened principles.

So we imagine that the death penalty will give us a pale version of justice when, in fact, it pulls us to-ward a confused brutality. The death penalty isn’t about the executed; it’s about who we are.

We’ll never figure out the death penalty

Please e-mail your letters to the editor to opinion@businessmirror.com.ph. Letters chosen for publication in this sec-tion are edited for brevity and clarity.

MAIL

t

By Catherine N. Pillas

Vehicle sales rose by 18 percent to 23,139 units in May, from 19,598 units a year ago, according

to a joint report released by the chamber of Automotive Manufacturers of the Philippines inc. (campi) and the Truck Manufacturers Association inc.

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phWednesday, June 10, 2015

Ayala Land fast-tracks construction of offices in Arca South project. . . Continued from A1

Auto sales up 18% in May

Top CEOs lower their economic outlook, plan less spending and hiring WA SHINGTON— Chief

executives at the largest US corporations lowered

their outlook for economic growth and planned less spending and hir-ing amid reduced expectations for sales during the next six months, according to a new survey. The CEOs forecast the econo-my will expand 2.5 percent this year, down from the 2.8-percent estimate in the first quarter, ac-

cording to the quarterly survey re-leased on Monday by the Business Roundtable trade association. The group’s economic index de-clined to 81.3 from 90.8 in the first three months this year. The long-term average is 80.5, and the index can range from 150 to negative 50. These results are consistent with an economy that continues to operate well below its full po-tential,” said AT&T Inc. Chief Ex-

ecutive Randall Stephenson, the group’s chairman. The drop in the index was caused by a major decline in expectations for sales, hiring and capital spending. Seven in 10 CEOs said they expected sales to increase in the next six months, the lowest level since 2012. The figure was 80 percent in the first quarter.

Slower remittance growth in January ‘positive’ forPHL economy–Moody’s

By Bianca Cuaresma 

MOOdy ’S Analytics, the research arm of the sovereign credit

rater Moody’s Investors Service, brushed aside on Tuesday the lower-than-consensus growth in remittance flows the past three months, say ing that this development was not necessarily bad. In an e-mailed response to a query from the  Business-Mirror, Moody’s economist for the Philippines Katrina Ell said what looks like a declin-ing trend of overseas Filipino workers’ (OFWs) remittance may actually be a positive de-velopment for the Philippines. Earlier this year, the remit-tances have flowed at an un-certain-rate trend. data from the Bangko Sentral ng Pilipi-nas (BSP) show the remittances growing by only 0.5 percent in January. There was a sligh recovery in February, when it grew by 4.2 percent, that analysts pointed out was below consensus for the period. Both rates were below market expectations and the government-set assumed rate of 5 percent.

In March, however, the re-mittances surged to double-digit growth, averaging 11.4 percent. This was the highest remittance- growth rate in five years. But no matter the uneven pace of expansion during the period, Ell said the foreign-currency earnings sent home by some 10 million OFWs have allowed the economy to post ro-bust domestic demand, and may be interpreted as an indicator of a healthy economy. “Remittances have long been the backbone of the Philippine economy. But growth is cooling, as opportunities, including em-ployment at home, improve, en-couraging more Filipinos to stay at home,” Ell said. BSP Governor Amando M. Tetangco Jr. earlier said the remittances, notwithstand-ing their uneven growth pace, should continue to support the $272-billion economy in the coming quarters, follow-ing the disappointing 5.2-per-cent expansion in January-to-March period. The government targets a 5-percent growth in remittances this year. The BSP is scheduled to release new remittance data on June 15. 

GUTIERREZ: “This growth is due to

the introduction of flexible financing

options and new model introductions from several brands

this year.”

The commercial block is situated along the main boulevard that con-nects to the proposed Skyway C5/C6 connector road. The initial phase of commercial activity will be kicked off by its shop-ping mall, the first two towers of the Arca South Corporate Center and the 265-room Seda Hotel Arca South. All three components have ongoing ex-cavation works and will be completed by 2018. The Ayala Malls will be a four-level structure and will have around 350 stores, plus a supermarket, a depart-ment store and four cinemas. Arca South Corporate Center will offer 24/7 tenant operations and ac-cess to major transport channels, making it ideal for business-process outsourcing (BPO). The buildings will have about eight floors that rise from the retail compo-nent in the lower level.

Comia said the company has man-aged to accelerate some of the proj-ect’s components, such as the office buildings, which may start operating one to two buildings by 2017 and four buildings by 2018, as a result of demand from the BPO firms. The company will open one build-ing a year, starting in 2017. All three Ayala residential brands, namely, Ayala Land Premier, Alveo and Avida, will also be in the development. “They have allowed us to attract different markets to Arca South by offering a wider range of residential projects. All three brands launched individual projects just last year. Across all three, we already have about 71-percent sales take-up,” Co-mia said. Arca South will be the main beneficiary of two government road-way projects that will further increase accessibility to the estate. The Intermodal Transport System,

a bus-terminal system that will ac-commodate as much as 4,000 buses and 200,000 commuters, is in the bidding process. The Skyway C5/C6 connector project that will provide one other exit to Makati City is currently undergoing engineering design. Comia said all of these develop-ments cover some 29 hectares, which is about three times the size of the Bonifacio Global City. Of the total P80-billion invest-ment; some 45 percent, or P36 billion, will be for land cost and land develop-ment, 21 percent, or P17 billion, will be for residential; and 34 percent, or P27 billion, will be for leasing, such as retail, office and hotel spaces. The first phase entails the devel-opment of 29 hectares, while the re-maining 45 hectares, which forms the second phase of the project, is still to be announced.

Sales posted in May boosted the performance of the local automotive industry in the first five months of the year. From January to May, sales of local auto firms rose by 107,280 units, from 89,335 units recorded in the same period last year. “This growth is due to the intro-duction of flexible financing options and new model introductions from several brands this year,” Campi

See “Top CEOs,” A2

President Rommel Gutierrez said in a statement. Passenger-car sales went up by 27 percent to 9,556 units in May, from 7,507 units recorded in May 2014. year-to-date sales of pas-senger cars jumped by 33 percent to 42,938 units, from 32,331 units recorded a year ago. Sales of commercial vehicles also recorded a double-digit expan-sion in May. Commercial vehicles sold during the month rose by 12 percent to 13,583 units. From January to May, sales of passenger vehicles went up by 13 percent to 64,342 units. Japa ne s e c a r m a k e r To yot a Motor Philippines Corp. led the in-dustry in May with a 44.6-percent market share, followed by Mitsubi-shi Motors Corp., with 19.2 percent; and Ford Motor Philippines, with an 8-percent share. Isuzu Philippines is the fourth top performer, with a 7.5-percent share,

while Honda ranked fifth, with a share of 6.3 percent. The local unit of American auto-maker Ford said its sales from Janu-ary to March rose by 19 percent to 8,557 units, from 7,167 units in the same period last year. However, its sales in May alone dipped by 3.4 percent to 1,652 units, compared to the 1,711 units recorded in the same month last year. Ford said its May sales rose due to the increasing popularity of its Eco-sport and Ranger vehicles, as well as the Mustang. “The all-new Mustang repre-sents the very best of Ford, and its first month’s performance shows just how eagerly awaited its ar-rival was in the Philippines,” said Kay Hart, managing director of Ford Philippines.  Ford is continuing with its na-tionwide dealership expansion this month with the opening of Ford Santa Rosa in Laguna.

By educational attainment, 22.2 percent of the unemployed were college graduates; 12.6 percent were college undergraduates; and 33.3 percent were high-school graduates. Citing PSA data, Balisacan noted that underemployment also improved to 17.8 percent, from the 18.2 percent registered in the same period in 2014. This accounts

for the 44,000 Filipinos who are no longer underemployed, reducing the total number to 7 million employed persons who want more work for the period. “If these developments are sustained for the rest of the year, the full-year average will likely surpass the Philippine Development Plan target of 6.6 percent to 6.8 percent for the

unemployment rate and 18 percent for the underemployment rate in 2015,” said Balisacan, who is also director general of the National Economic and Development Authority.

While employment grew by 1.3 percent year-on-year in April, Balisacan said this is “generally slower” than the figure posted in the same period

last year. “The slight setback was mainly due to the El Niño phenomenon that impacted the agriculture sector, which accounts for about one-third of employment,” Balisacan said. “To ensure that the gains in employment are sustained, the government must continue its interventions in the agriculture sector and pursue adequate infrastructure spending to boost economic growth and employment,” he added. In agriculture, he stressed the need to implement disaster-risk management strategies and other precautionary measures against drought, floods and rain-induced landslides in hazard prone areas. This is to mitigate, as well as prevent, any further adverse effects of natural

disasters on the country’s economy, especially on employment. The employment rate in April 2015 was estimated at 93.6 percent, higher than the employment rate for April 2014, pegged at 93 percent. The PSA noted that the labor and employment data for the April 2015 LFS round still excludes Leyte. Due to large number of households displaced in the province by Supertyphoon Yolanda, a new sampling frame for the province of Leyte has to be created for it to be included in the survey. The old listing of households for Leyte used as sampling frame for the 2003 Master Sample is no longer usable, according to the PSA. With a report from Mia Rosienna P. Mallari

Jobless rate worsens in NCR. . . Continued from A1