A broader look at today’s businessBusinessMirrorthree-time

rotary club of manila journalism awardee2006, 2010, 2012u.n. media award 2008

www.businessmirror.com.ph n Friday, November 7, 2014 Vol. 10 No. 30 P25.00 nationwide | 7 sections 32 pages | 7 days a week

By Bianca Cuaresma

The local currency the peso weakened by 3 centavos at the close

of trading on Thursday to 45 per dollar, a manifestation of global developments potentially exposing emerging markets like the Philippines not only to currency volatilities down the line but capital flight, as well.

This sentiment was aired by the sovereign credit watcher Moody’s Investors Service, saying interest- rate adjustments expected in a while from the Unites States, still the country’s top trading partner, will generate economic headwinds that the beneficial impact of the fiscal-stimulus programs in the euro-area countries and in Japan can hardly begin to offset. Data from the Philippine Dealing System Holdings Corp. (PDS) show the local currency hit 45 to a dollar on Thursday, shedding 3 centavos of value from the previ-ous day’s close of 44.97 to a dollar.

See “Peso,” A4

‘Headwinds’ drag down peso

Record land sale raises fears assetbubble formingReCoRD bids for two plots of land in a Ma-

nila business district have lifted prices to a 17-year high, raising concerns that a property

bubble is forming. The 1,600-square-meter (17,200-square-foot) site in the former military camp of Bonifacio fetched P732.8 million ($16.3 million) and P800 million each at a government auction in September. That was a record half-a-million pesos per square meter, about 80 percent higher than the previous government land sale in the area, according to the local associate of Savills Plc. The “Philippines is at risk for an asset bubble,” said Antton Nordberg, a property analyst at KMC MAG Group Inc., Savills’s associate in the country. “The price of the land is just too high.”

dollar strenGtheninG Puts local currency at ‘PsycholoGically imPortant’ 45/$

Economy shows lessdependence on debt

By David Cagahastian

THe country’s outstanding public-sector debt (oPSD) dropped to P7.6 trillion in

March, or equivalent to just 64.3 percent of the gross domestic prod-uct (GDP) at that time. This represented a 7-percentage-point decrease from the 71.3 percent in March 2013, indicating that the Philippine economy was able to register robust growth with little dependence on debts.

The Department of Finance (DoF) attributed the decline in the ratio of oPSD to GDP to the actual drop of P79 billion in the oPSD from figures that were registered in December 2013, as well as the high GDP growth rates during the one-year period from March 2013 to March 2014. The Philippines registered a record 7.2-percent GDP growth by the end of 2013. “The steep decline in oPSD-to-GDP ratio is primarily attributed

saudi moVe betraysits oPec suPremacySaudi arabia showed little concern for fellow members

of the Organization of Petroleum Exporting Countries (Opec) by unilaterally cutting its oil prices to the united

States this week, a move that casts doubts on the cartel’s cred-ibility and its ability to find a common plan to stabilize the slumping energy market. and while Opec struggles to find consensus, oil prices risk remaining low—or falling further—to the benefit of consum-ers and businesses in the uS and worldwide. The Opec is already riven by differences among its members on what the ideal price level should be. That is exemplified in the rivalry between heavyweights Saudi arabia, which can withstand lower prices, and iran, which relies on a stronger market to remain profitable.

Peso exchanGe rates n us 44.8930 n jaPan 0.3913 n uK 71.7121 n hK 5.7912 n china 7.3419 n sinGaPore 34.7147 n australia 38.5447 n eu 56.0579 n saudi arabia 11.9660 Source: BSP (6 November 2014)

Continued on A2Continued on A2

GRaNd PRIZe wINNeR BusinessMirror (BM) Publisher T. anthony Cabangon (fourth from left) awards the BM ninth anniversary raffle grand prize—a Mitsubishi Mirage G4—to the winner Nicole Raymundo-delmonte of the Land Bank of the Philippines (fourth from right). They are joined by (from left) adel Gasmin, BM vice president (VP) for finance; Ricky alegre, BM VP for corporate affairs; arvee Verdadero of diamond Motor Corp.; aldwin Tolosa, BM advertising manager; Paul Michael Inocencio of diamond Motor Corp.; and Marvin estigoy, BM VP for advertising ales. ROY DOMINGO

texas energygroup askscourt to haltfracking ban

flashgordon!

time, spaceand jessicachastain

inside

WHO’S AFRAID OF THE OVEN

»D3THE OVEN

»D3Life Friday, November 7, 2014 D1BusinessMirrorEditor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

DEAR Lord, most of us dream at any time of the day. And to experience dreaming the

impossible dream is rightful to anyone because it costs nothing. All kinds of people can do it. To fight the unbeatable foe; to bear with unbearable sorrow; to run where the brave dare not go. Help us, oh Lord, to achieve our goal in life, to realize our dream to be with You in heaven, which is not impossible. Amen!

The impossible dream

WORD & LIFE MAGAZINE AND LOUIE M. LACSONWord&Life Publications • teacherlouie1965@yahoo.com

TIME, SPACE AND

JESSICA CHASTAIN

B S R� e Philadelphia Inquirer

JUILLIARDTRAINED. Schooled in Shakespeare, Strindberg, Oscar Wilde. Dedicated to her art, and to the idea of art.

But in Interstellar, the widescreen sci-fi epic from Christopher Nolan,

now in theaters everywhere, Jessica Chastain plays a scientist with a head full of equations, and questions, about time, relativity, quantum mechanics. She’s an astrophysicist.

A stretch, right?“Actually, I am an astrophysicist,” insists the

C D

Texas energy group asks court to halt fracking ban

Beijing wants Apec to push Chinese trade agreement

The WorldBusinessMirrornews@businessmirror.com.ph Friday, November 7, 2014 B3-3

DENTON, Texas—A Texas city that sits atop a natural gas re-serve is preparing for an ex-

tended court battle after voters made it the fi rst in the state to ban further hydraulic fracturing—a fi ght that cit-ies nationwide considering similar laws likely will be watching closely.

An energy industry group and the state’s little-known but powerful General Land O� ce responded quickly to the measure Denton voters approved on Tuesday night, � ling a petition on Wednesday in district court seeking an injunction to stop the ban from being enforced.

� e ban could lead to similar bans in other Texas cities, threat-ening an “energy renaissance” in shale gas from hydraulic fractur-ing, or fracking, said David Porter, a commissioner on the Texas Rail-road Commission, the state’s oil and gas regulator.

Dozens of cities in other states have considered similar bans over health and environmental concerns. But Denton, a university town north of Dallas, is a test of whether any community in Texas—the nation’s biggest oil and gas producer—could push back against the industry and still thrive.

Fracking involves blasting a mix of water, sand and chemicals deep into underground rock formations to release trapped oil and gas. � e recent rise of fracking in the US by

shale oil producers has boosted US oil output to the highest level in decades.

But some communities worry about e� ects on the environment, including water and air pollution.

Nationally, courts have come down on both sides of the issue.

New York’s highest court deter-mined that local governments have land-use powers to say where oil and gas wells can be located, even to the extent of an outright ban. But a judge in Boulder, Colorado, ruled that a fracking ban interfered with the state’s interests, which take pre-cedence there.

Battling the fracking ban will be the � rst � ght for Texas Land Com-missioner-elect George P. Bush, who is the nephew of one US president and the grandson of another. � e founding manager of an energy and infrastructure consultancy, Bush promoted the economic bene-� ts of hydraulic fracturing through-out his campaign.

� e courts must “give a prompt and authoritative answer” on whether Denton voters had the authority to ban fracking, Texas Oil and Gas As-

IN this July 15 � le photo, Topher Jones (from left) of Denton, Texas; Edward Hartmann of Dallas and Angie Holliday of Denton, Texas, hold a campaign sign outside city hall in Denton, Texas. Tensions are mounting as big oil companies and hydraulic fracturing opponents try to sway voters to their side over a Tuesday referendum that would make Denton the � rst Texas city to ban further permitting of the drilling practice known as fracking. AP

sociation attorney Tom Phillips, a former chief justice of the Texas Su-preme Court, said on Wednesday.

“We believe the city of Denton lacks authority to ban the only com-mercially viable method of producing oil and gas in their locality,” he said.

Industry groups that have

warned the ban could deliver a se-vere hit to Denton’s economy. � e gas � elds under it have produced $1 billion in mineral wealth and pumped more than $30 million into city bank accounts.

Pro-bono environmental lawyer have o� ered Denton Drilling Aware-

ness Group, which submitted the pe-tition for a fracking ban ordinance in June, assistance in the case.

“We’re in it for the long haul,” founder Cathy McMullen said.

Denton’s city attorney is review-ing the energy industry group’s peti-tion and has said the city council has

as much as $4 million in a risk fund to combat legal challenges, according to city spokesman Lindsey Baker.

Property rights in Texas are split between the land and the minerals below. Phillips says the ban violates the Texas Constitution. Baker says that’s for the courts to decide. AP

Ebola countries to receive $450 million in fi nancing UNITED NATIONS—A new pri-

vate sector initiative announced on Wednesday will provide at

least $450 million in commercial � nanc-ing to the three West African countries hardest hit by Ebola to promote trade, investment and employment.

� e International Finance Corp., which is part of the World Bank Group, announced that the package will in-clude $250 million in rapid response projects and at least $200 million in investment projects to support the economic recovery of Liberia, Sierra Leone and Guinea after the Ebola out-break is controlled.

� e announcement coincides with the United Nations Development Pro-gram’s (UNDP) release of a study on the socioeconomic impact of the out-break, which found that the govern-ments of the three countries need $328 million to be able to function at precrisis levels. � e study said the shortfalls are caused by increased spending to tackle Ebola and the slow-down of economic activity in � elds, such as tourism, mining and trade.

“Ebola is a humanitarian crisis � rst and foremost, but it’s also an economic disaster for Guinea, Liberia and Sierra Leone,” World Bank President Jim Yong Kim said in a statement. “� at’s why in addition to our emergency aid, we will do all we can to help support the private sector in these countries to build back their business.”

IFC, the largest global develop-ment institution that focuses exclu-sively on the private sector, said its initiative includes a $75-million Eb-ola Emergency Liquidity Facility to fund critical imports for the Ebola-a� ected countries, including energy, food and agricultural commodities, and manufactured goods.

IFC said its board approved the rapid response program last week. It will initially be available to six IFC cli-ent banks and could be expanded to additional banks.

IFC Executive Vice President and CEO Jin Yong Cai said the corporation “will � nd and create opportunities to encourage private investors to play a large role in the recovery of mar-kets directly and indirectly a� ected by the ongoing Ebola outbreak in West Africa.”

� e UNDP study found that be-cause of Ebola, government ex-

THIS February 28 � le photo shows Samantha Power, US ambassador to the United Nations, speaking during a news conference after a private UN Security Council meeting. Power is going to visit all three of the West African countries hit hardest by the Ebola outbreak. A statement released on October 25 by the US mission to the UN says Power will visit Liberia, Sierra Leone and Guinea “to draw attention to the need for increased support for the international response.” AP

penses have risen about 30 percent in Liberia, Sierra Leone and Guinea, and � scal de� cits in the three countries are rising. In addition, Liberia has sacri-� ced $20 million worth of infrastruc-ture improvements and Sierra Leone has sacri� ced $16 million worth since the beginning of the crisis, it said.

In Liberia, half the mining and ag-ricultural concessions have reduced their activities, UNDP said. In north-east Guinea, exports of fruit and veg-etables to neighboring countries have dropped 90 percent, and in Sierra Leone’s capital, Freetown, nearly all bars, restaurants and nightclubs have closed. � at has forced the country’s largest brewery to scale down opera-tions, culminating in a loss of 24,000 jobs in the supply chain.

� e � nancial constraints have forced the three countries to resort to domestic and international bor-rowing, and they have already taken � nancial packages from the Interna-tional Monetary Fund and the World Bank, UNDP said. AP

WASHINGTON—US services � rms ex-panded more slowly

in October, but the pace of growth was still healthy. Hir-ing also rose to the fastest pace in more than nine years.

� e Institute for Supply Management said on Wednes-day that its services index dropped to 57.1 in October, down from 58.6 in September. � at was the second-straight drop after the index had risen steadily since February to 59.6 in August, the highest in eight years. Any reading over 50 indicates expansion.

Steady hiring this year means more Americans are earning paychecks, which supports spending at retail stores, ho-tels and other service com-panies. While solid, Wednes-day’s data indicates that growth among service � rms is cooling o� a bit after rapid expansion earlier this year.

� e ISM is a trade group of purchasing managers. Its

survey of services � rms covers businesses that employ 90 per-cent of the American work force, including retail, construction, health care and � nancial ser-vices � rms.

Sixteen industries tracked by the survey reported growth, led by construction, retail and agriculture. Two industries shrank: arts, entertainment and recreation, and � nance and insurance.

A gauge of hiring rose to 59.6, its highest level in nine years. � at increase suggests that Friday’s government re-port on jobs and unemploy-ment could show another strong gain.

Earlier on Wednesday, pay-roll processor ADP said busi-nesses added 230,000 jobs last month, the most in four months and a sign of healthy hiring.

And Jim O’Sullivan, an econ-omist at High Frequency Eco-nomics, noted that October’s 57.1 is still far above the aver-age reading of 54.4 in the � rst

half of the year.Still, there were plenty of

signs that growth among ser-vice � rms may have reached a plateau after accelerating for most of this year. A gauge of new orders fell nearly two points to 59.1, and a measure of order backlogs also fell.

“� e majority of the respon-dents’ comments re� ect favor-able business conditions,” said Anthony Nieves, chairman of the ISM’s services index com-mittee. “However, there is an indication that there continues to be a leveling o� from the strong rate of growth of the preceding months.”

New export orders fell sharply, to 53.5 from 57.5 in September, a sign that slowing growth overseas is beginning to impact US � rms. However, most of the � rms responding to the survey are focused on the US market and don’t have any international business. Only about 35 percent said they had any overseas sales. AP

IN this October 23 photo, Christi Ferretti, co-owner and chef of Pine Valley Market, cuts kale at the market in Wilmington, North Carolina. The Institute for Supply Management, a trade group of purchasing managers, issues its index of nonmanufacturing activity for October on November 5. AP

U.S. SERVICES FIRMS GROW MORE SLOWLY, BUT HIRING UP

BEIJING—China plans to use a meeting of Asia-Pa-ci� c leaders to promote a regional trade initiative at a time when progress on a rival US-led trade deal

has stalled, injecting a note of rivalry into an annual sum-mit that aims for consensus.

The two-day meeting of 21 countries including the US, Japan and South Korea is the � rst major international gathering in China since President Xi Jinping came to power. Starting on Monday, the Asia Paci� c Economic Cooperation (Apec) meeting gives China, the world’s second-largest economy, a platform to assert itself as a regional leader.

The proposal promoted by China, the Free Trade Area of the Asia Paci� c, is part of an agenda that also includes talks on cooperation in environmental protection, energy e� ciency and urbanization.

“We will reach important consensus” on the launch of the free trade process, said Foreign Minister Wang Yi at a news conference ahead of the gathering.

China’s campaign for the initiative comes as Beijing tries to claim a bigger role in US-dominated global trade, security and � nancial structures.

Last month China and 20 other Asian nations launched a bank to pay for roads and other infrastruc-ture, despite US objections it is an unneeded rival to the World Bank. Beijing is providing most of the $50 bil-lion in start-up capital.

In May, Xi called for the creation of a new Asian struc-ture for security cooperation based on a 24-nation group that excludes the US.

Beijing worries Washington is pursuing a “strategy of containment” against China and sees a China-led trade pact as a way to gain in� uence, said Chen Bo, a trade specialist at the Shanghai University of Finance and Economics.

“China doesn’t want to be led by the nose by the US,” Bo said. “The more they have in hand, the better their negotiating ability will be. Then people will want to join China, instead of China joining other countries.” AP

IN this photo taken on October 29, an elderly Chinese man sits near a restaurant in the Huairou district where a hotel, the venue for the upcoming Apec summit, is, in Beijing. AP

The woRLd B3-3

flashGORDON!

C1 | Friday, November 7, 2014mirror_sports@yahoo.com.ph

sports@businessmirror.com.phEditor: Jun Lomibao

S ALT LAKE CITY—Gordon Hayward made a step-back jump shot at the buzzer, one-upping LeBron James and boosting the Utah Jazz to a 102-100 victory over the struggling Cleveland Cavaliers on

Wednesday. Hayward, who had 21 points, broke free of James to catch an inbounds pass, faked a move to the basket and then stepped back on the right wing and swished a 21-foot jump shot as the horn sounded. The forward was mobbed by his Jazz teammates in a scene reminiscent of a college tournament game. San Antonio’s Tim Duncan had 17 points and 13 rebounds as the Spurs held on for their 17th straight win, 94-92, at home over the Atlanta Hawks. The Spurs had a season-high 25 assists for a balanced scoring effort that they needed to fend off the Hawks’ furious rally in the final quarter. Tony Parker scored 17 points and Manu Ginobili added 12, including a pair of free throws with 3.8 seconds remaining. DeMarre Carroll and Paul Millsap each had 17 points for Atlanta (1-2). Al Horford added 10. In Milwaukee Derrick Rose returned from his latest injury to help the Chicago Bulls to a 95-86 victory over the Bucks. Taj Gibson scored 23 points, Pau Gasol added 22 and Rose had 13 points and seven assists in 32 minutes for the Bulls, who have beaten the Bucks nine straight times in Milwaukee. Giannis Antetokounmpo had 13 points and eight rebounds for the Bucks. Rose returned from his latest injury and helped the Bulls, who have beaten the Bucks nine straight times in Milwaukee. With Chicago leading by one, Gasol hit a jumper and Butler made an acrobatic lay-up. That started a clinching 9-2 run that was capped by Kirk Hinrich’s three-pointer with 2:16 remaining. Rose, who missed most of the past two seasons because of serious knee injuries, sat out the Bulls’ previous two games with sprains in both ankles. The Memphis Grizzlies downed the Phoenix Suns, 102-91, after Mike Conley had 24 points and 11 assists, while Greg Monroe had 23 points and 18 rebounds in the Detroit Pistons’ 98-95 win over the New York Knicks. In other games, Kyle Lowry scored 35 points and had a key steal in the closing minute to lead the Toronto Raptors over the Boston Celtics, 110-107; the Charlotte Hornets beat the Miami Heat, 96-89; the Minnesota Timberwolves defeated the Brooklyn Nets 98-91; and the Washington Wizards claimed a 96-95 overtime win over the Indiana Pacers. The Orlando Magic edged the Philadelphia 76ers, 91-89; the Golden State Warriors trounced the Los

Angeles Clippers, 121-104; and the Sacramento Kings were 131-109 winners over the Denver Nuggets. Memphis used a strong defensive effort in the third quarter to beat Phoenix and remain unbeaten. The Grizzlies, who won all four meetings last season, forced 10 turnovers in the third and turned an 11-point deficit in the second period into a five-point lead going into the fourth. Conley and fellow guard Courtney Lee, both coming off injuries, combined to score 17 of Memphis’s 30 third-quarter points. Lee, who missed the past two games with a concussion, scored 22 points with four-of-five shooting on three-pointers. Memphis (5-0) is off to the best start in franchise history. Eric Bledsoe made his first eight shots for Phoenix and finished with a season-high 23 points. DeMar DeRozan had 23 points and Patrick Patterson added 14 for the Raptors. Rajon Rondo led Boston with a triple-double of 13 points, 15 assists and 10 rebounds. Jeff Green had 20 points for the Celtics, who have lost three straight after a season-opening win over Brooklyn. With the score tied at 105, Lowry stripped rookie Marcus Smart and fed DeRozan for a fast-break lay-up with 33 seconds left. He was fouled on the play and hit the free throw. Rondo’s two free throws sliced it to one, but Lowry nailed a fadeaway jumper from the left wing with eight seconds to play. Green back-rimmed a long trey and Boston’s Jared Sullinger grabbed the rebound, but time ran out. Al Jefferson scored a season-high 28 points and add ed 10 rebounds as Charlotte ended a 16-game, regular-season losing streak against Miami. Charlotte was winless against the Heat in the LeBron James era, including getting swept in the first round of the Eastern Conference playoffs by Miami last season. Kemba Walker had 16 points and seven assists, and Cody Zeller turned in another solid game off the bench with 13 points and eight rebounds for the Hornets (2-3), who won for the first time since the season opener. Chris Bosh had 23 points and 13 rebounds for Miami (3-2). It was Bosh’s fifth straight 20-point game to open the season. Nikola Pekovic converted a tiebreaking three-point play with 48 seconds left as Minnesota scored the final nine points of the game to beat Brooklyn. Kevin Martin led the Timberwolves with 26 points and rookie Andrew Wiggins, playing in the arena where he was taken by Cleveland with the No. 1 pick in the draft, added 17. Joe Johnson had 22 points for the Nets (2-2), who had won their last two games. Deron Williams added 19. AP

Gordon Hayward was mobbed by his

Jazz teammates in a scene reminiscent of

a college tournament game after he made a

step-back jump shot at the buzzer, one-

upping LeBron James and boosting Utah

to a 102-100 victory over struggling

Cleveland.

» THE Jazz’s Gordon Hayward (20) celebrates with Trey Burke (3) after

scoring against the Cavaliers. AP

MEssi BraCE Equals rECordAMSTERDAM—Lionel Messi’s brace gave Barcelona

a 2-0 victory on Wednesday over 10-man Ajax and moved him level with Raul Gonzalez’s all-time

Champions League scoring record of 71 goals. Messi scored his 70th Champions League goal in the 36th minute with a soft header after Ajax failed to clear a free kick and linked with substitute Pedro Rodriguez for his second on the night in the 76th. The win assured Barcelona of qualification for the

knockout stage of Europe’s top club competition as Paris Saint-Germain beat APOEL Nicosia, 1-0, to

stay on top of Group F. Ajax played the last 20 minutes

with 10 men after defender Joel Veltman was sent off for his second yellow card. Veltman

also was red carded last year when Ajax beat Barcelona, 2-1, in Amsterdam.

“The record wasn’t the goal for today, that was the three points that qualified us for the next round and that’s why we are leaving feeling happy,” Messi told Canal Plus television. “We played against a team that plays football well and, if you let them, move you from one side of the pitch to the other. It was difficult for us to pressure them because of their mobility, but we took advantage of the chances we got. Later, they went down to 10, but in general the match was even.” Messi notched his record-leveling goals in his 90th match in Europe’s top club competition. Former Real Madrid and Schalke striker Raul took 142 matches to reach his tally. “Messi is absolutely the best player I have ever seen as player or coach,” Barcelona Coach Luis Enrique said. His strikes came a night after Cristiano Ronaldo, who has scored 70 Champions League goals, failed to find the net in Real Madrid’s 1-0 victory over Liverpool. Ajax had the best of the early exchanges and Lucas

Andersen shot just wide in the 18th minute after a surging run by 19-year-old winger Anwar El Ghazi. Andersen, Lasse Schone and El Ghazi all stretched the Barcelona defense as Ajax piled on the pressure, but Frank de Boer’s team could not convert its possession into a goal and Barcelona made them pay. “We made a game of it in the first half,” De Boer said. “It’s a shame we weren’t rewarded for our good play.” Jasper Cillessen did well to save a 35th-minute Messi free kick but Ajax failed to clear and center back Marc Bartra hooked the ball back into the area for Messi to score with a soft header that Ricardo van Rhijn just failed to clear off the line. Neymar almost doubled Barcelona’s lead five minutes after the break when he shrugged off two defenders but his shot struck the outside of the post. AP

» lioNEl MEssi is tackled by ajax’s Joel Veltman before getting a red card in their match on Wednesday. AP

SportsBusinessMirror

sPoRTs C1

LIFe d1

See “Saudi,” A4

SUNRISE SUNSET

5:53 AM 5:25 PM

MOONRISEMOONSET

5:51 AM 5:55 PM

TODAY’S WEATHERMETROMANILA

LAOAG

BAGUIO

SBMA/CLARK

TAGAYTAY

LEGAZPI

PUERTOPRINCESA

ILOILO/BACOLOD

TUGUEGARAO

METROCEBU

CAGAYANDE ORO

METRODAVAO

ZAMBOANGA

TACLOBAN

3-DAYEXTENDEDFORECAST

3-DAYEXTENDEDFORECAST

CELEBES SEA

LEGAZPI CITY24 – 32°C

TACLOBAN CITY23 – 31°C

CAGAYAN DE ORO CITY

METRO DAVAO24 – 32°C

ZAMBOANGA CITY24 – 30°C

PHILI

PPIN

E ARE

A OF R

ESPO

NSIB

ILITY

(PAR

)

SABAH

(AS OF NOVEMBER 6, 5:00 PM)

PUERTO PRINCESA CITY 23 – 30°C METRO CEBU

24 – 31°C

ILOILO/BACOLOD

25 – 31°C

24 – 31°C

24 – 31°C 23 – 32°C 23 – 32°C

24 – 31°C 24 – 32°C 24 – 32°C

24 – 31°C 24 – 31°C 23 – 32°C

25 – 32°C 24 – 33°C 24 – 33°C

25 – 31°C 25 – 32°C 25 – 32°C

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

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

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

www.panahon.tv

@PanahonTV

NOVEMBER 7, 2014 | FRIDAY

HIGH TIDE

11:00 AM0.52 METER

MANILA SOUTH HARBOR

LOW TIDE

4:36 PM-0.07 METER

TUGUEGARAO CITY 21 – 30°C

LAOAG CITY 21 – 32°C

METRO MANILA24 – 30°C TAGAYTAY CITY

19 – 28°C

SBMA/CLARK 24 – 32°C

24 – 31°C 24 – 31°C 24 – 31°C

21 – 31°C 21 – 31°C 21 – 30°C

21 – 31°C 21 – 31°C 21 – 31°C

15 – 23°C 15 – 22°C 15 – 23°C

20 – 28°C 20 – 29°C 20 – 29°C

23 – 30°C23 – 31°C 22 – 30°C

23 – 30°C24 – 31°C 24 – 31°C

NOV 7

NOV 8 SUNDAY MONDAY SATURDAY

NOV 9 NOV 10 NOV 8 SUNDAY MONDAY SATURDAY

NOV 9 NOV 10

23 – 31°C23 – 31°C 23 – 30°C

24 – 32°C24 – 32°C 25 – 32°C

INTERTROPICAL CONVERGENCE ZONE (ITCZ) AFFECTING MINDANAO.

NORTHEAST MONSOONAFFECTING NORTHERN LUZON.

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

Cloudy skies with rain showers and/or thunderstorms.

HALF MOONFULL MOON

11:16 PM6:06 AMNOV 14NOV 7

Partly cloudy to at times cloudy with rain showers.

Intertropical Convergence Zone (ITCZ) is the result of the Northern and Southern Hemisphere tradewind convergence; widespread

cloudiness, occasional thunderstorms, precipitation and moderate to strong surface winds are associated weather conditions.

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

cloudiness with rains and showers.

BAGUIO CITY14 – 22°C

Economy shows less dependence on debt

Land prices in the Philippine capital’s five major business districts have surged to the highest since the Asian financial crisis in 1997-1998 as accelerating eco-nomic growth, rising remittances from more than 10 million Filipinos overseas and low borrowing costs fuel demand. The boom is spreading outside Manila, prompting the central bank to cap the value of property that can be used as loan collateral in part to cool real-estate lending and investment that breached P1 trillion as of the end of June. The record bid “has an effect on prop-erty prices and rents,” Kash Salvador, a Manila-based investment manager at bro-ker CBRE Group Inc., said in a telephone interview on October 15. “It could create the belief that anyone is able to lock in value seen usually in top-tier property.”

Rising valuesLAnd values in at least seven cities tracked by Colliers International UK Plc. .climbed in the last quarter to the highest since the 1997-1998 Asian crisis, property

analyst Romeo Arahan said. Manila home prices have surpassed 2008 levels and of-fice space is near a six-year high, accord-ing to Colliers, as the Philippine economy expanded more than 6 percent in nine of the last 10 quarters to the end of June. Closely held Goldenwill Inc. and Fo-cus Palantir Inc. outbid a unit of Rob-insons Land Corp., the second-largest operator of shopping malls in the Phil-ippines, at the September 23 auction of the land sold by the Government Ser-vice Insurance System in Bonifacio. The Social Security System sold a Bonifacio property for P277,000 per square meter a year earlier. Based on the maximum of 12-story building height allowed in the area, average construction cost of about P60,000 per sq m and an average profit margin of 40 percent, the developers may fetch P170,000 per sq m, KMC MAG’s nordberg said.

Higher pricesThAT will be 21 percent higher than cur-rent prices for office space and 30 percent more than apartments in Bonifacio, KMC MAG said in a note. The developers didn’t

give details about their buildings plans. At P170,000 per sq m, investors must be ready to accept yields closer to 5 per-cent, nordberg said. Yields are 9 percent for office space in Manila and 7 percent for residential, according to CBRE data. Residential condominium rents and prices increased about 5 percent each in the second quarter from a year earlier, according to Colliers. Office rents added 6.9 percent in the three months through June from a year earlier, the fastest pace in four quarters, while capital values rose about 5 percent, the broker said. Banks’ exposure to real estate jumped 22 percent in the second quarter from a year earlier, climbing the most since the central bank first began tracking the in-vestments in 2012.

Lending curbsWhILE prices may be rising too fast in some parts of the property market, overall “you don’t see any clear evi-dence of a real-estate bubble,” central bank Governor Amando M. Tetangco Jr. said on October 29. Tighter lending measures should help prevent a “sharp

and abrupt” correction, Tetangco said. Bangko Sentral ng Pilipinas raised its benchmark interest rate twice this year, to 4 percent, from a record-low of 3.5 percent. The central bank said last month it will release an index to better gauge how real-estate prices affect the economy. Property loans will moderate in the next two years after Bangko Sentral last month ordered lenders to cap the collateral value of real-estate mortgages at 60 percent, said Michael Wan, a Singapore-based economist at Credit Suisse Group AG. A correction in the housing market is overdue, said Jose Sio, CFO at SM Invest-ments Corp., which controls one of the nation’s biggest builder. Sales at Megaworld Corp., the na-tion’s largest provider of space for out-sourcing companies, continue to do well, Jericho Go, a senior vice president, said on October 27. Megaworld shares rose to an all-time high the day after the Bonifacio sale. The company is the top landlord in the area, where it is developing 105 hectares (259 acres) into four different township projects. Bloomberg News

news@businessmirror.com.ph A2 BusinessMirrorFriday, November 7, 2014

Newsto the combination of an increase in GDP levels between the intervening period, a decline in Bangko Sentral ng Pilipinas (BSP) borrowings due to the drop in regular and special deposit accounts, and an increase in intrasec-toral holdings coming from national government and government-owned and -controlled corporations deposits with the government-owned financial

institutions [GFIs], securities held by GFIs and BSP, and GFIs’ deposits at BSP,” the DOF said in a statement. The DOF said the P79-billion reduc-tion in the OPSD is due to the P91.9-billion, or 1.7-percent decrease in the public-sector domestic debt, which off-set a P12.9-billion, or 0.6-percent in-crease in the public-sector foreign debt. Nonfinancial public-sector debt went down by 0.6 percent to P5.9 trillion, equivalent to 49.9 percent of GDP.

This is because of the decrease in the debt of the national government and local government units, which fell by P52.7 billion and P2 billion, respec-tively. The outstanding debt of finan-cial public corporations decreased by 3.5 percent to P3.7 trillion. The BSP’s debt registered a decrease of 3.6 percent, and also a decline by 3 percent in the debt of the GFIs from December 2013 level. As of March 2014, 29.3 percent of

the OPSD is owed to foreign creditors, while the remaining 70.7 percent is owed to domestic creditors. National Treasurer Rosalia de Leon welcomed the decline of the OPSD-to-GDP ratio, saying: “As public-sector debt continues its downward trajec-tory, we are seeing how committing to prudent fiscal management has paved the way to ensure that future generations bear a lesser burden for our nation’s development.”

Continued from A1

Continued from A1

Record land sale raises fears asset bubble forming

By Rene Acosta

DISASTER- and natural calamity-response is not the sole responsi-bility of the national government,

but of the whole country as well, where the local government and all of the Filipinos should be involved. Executive Director Alexander Pama of the National Disaster Risk Reduction and Management Council (NDRRMC) said this on Wednesday at the 13th Jaime V. Ongpin’s lecture on public service in business and government at the Ateneo de Manila University. “I believe that key to a successful DRRM [disaster-risk reduction and man-agement] system does not rest with the NDRRMC and the government alone. It calls for the proactive cooperation of the entire nation,” he said. “It comes with the territory that the NDRRMC can be the ‘lightning rod’ of deserved or undeserved criticisms when things fail. But at the end of the day, we need to act as one,” added Pama, who is also the administrator of the Office of Civil Defense. At the rate disasters and calamities have been hitting the country each year, the NDRRMC head said it is high time ev-ery Filipino and even local officials made DRRM a part of their consciousness, if not a “daily habit.” The country is naturally exposed to a number of hazards as it is located in a typhoon belt and in the Ring of Fire. It has 23 active volcanoes and transected by a number of fault zones, including the 1,250-kilometer Philippine Fault Zone stretching from Northwest Luzon to Southeastern Mindanao. The country’s archipelagic features also exposed its significant areas into tsunamis. But despite these hazards, Filipinos are still struggling or are still being forced to consider disaster-risk reduction and man-agement system a part of their routine. “A significant but non-institutional factor, however, that contributes to our vulnerability to disasters is the evident mind-set and culture of most Filipinos in dealing with disasters…sadly, most of us still have the bahala na attitude,” Pama said. Pama said the country is visited by an average of 20 typhoons a year, and from 1970 to 2013, there have been 856 tropical cyclones recorded that entered the Philip-pine Area of Responsibility. At least 322 of these, or around 37 per-cent were considered “destructive.” As shown by their destructive nature, for the past 20 years, tropical cyclones have claimed 17,119 lives, injured 51,068 individuals with 5,198 missing. They have also affected at least 24.8 million families and caused damages to agriculture, infra-structure and private properties worth

THE National Police said on Thurs-day that the kidnapping-for-ran-som charges that it filed against

the abductors of two Germans was rein-forced not only by the admission of the suspects about the payment of ransom, but even by their act of displaying the money on the Web. Senior Supt. Roberto Fajardo, chief of the National Police Anti-Kidnapping Group, said whether ransom was paid or not, the suspects in the kidnapping of Ger-mans Stefan Viktor Okonek and Henrike Dielen would still stand trial for kidnap-ping for ransom. “They were boasting that a ransom money was paid, but even if there was none, the mere fact that they demanded ransom money makes them liable for the case,” Fajardo said. “But with their statement about the existence of a ransom money, then all the more that they are liable,” he added. Fajardo could not confirm whether money was indeed paid for the freedom of the German couple who were released by their Abu Sayyaf captors in Sulu on October 17. Fajardo said investigators were still verifying reports about the payment of ransom or even the claims of the local terrorist group.

A video clip posted by the Abu Sayyaf Group (ASG), through its self-proclaimed spokesman Muamar Askali, alias Abu Rami, showed the money in P1,000 bills. The ASG claimed it received P250 million for the release of Okonek and Dielen. The Armed Forces chief of staff, Gen. Gregorio Pio Catapang, however, said the bills could be counterfeit, as he debunked claims about the payment of ransom. Nevertheless, Catapang ordered an investigation into the alleged payment of ransom. “I have ordered an investigation into this matter because the ASG could just be trying to create confusion to mislead the general public to believe that ransom was indeed paid,” Catapang earlier said. Even before the ASG confirmed that it had received money for the release of the Germans, reports were already circu-lating that the two victims were freed in exchange of P250 million. Fajardo said they have already filed kidnap-for-ransom charges before the De-partment of Justice against the kidnappers on October 29 and they were hoping that it could reach the court soon so that warrants of arrest could be issued against the suspects. “We hope that we could get warrants of arrest immediately so that we could start serving it against them,” he said. Rene Acosta

House Resolution 1638, authored by Party-list Reps. Neri Colmenares and Carlos Zarate of Bayan Muna, said various groups, including the survivors, complained of slow recovery efforts in Yolanda-devastated ar-eas, while tens of thousands of survivors are still living in tents and bunkhouses, have no substantial economic activities and sustain-able jobs, and feel neglected. “It is important that Congress determine the actual death toll, the report on ‘slow’ re-covery efforts, and the questions on the dis-bursement of the cash donations and supple-mental budget to provide relevant measures that would ensure adequate services and ju-dicious use of funds for the survivors,” the resolution said. It added that the investigation is also important to make sure that the P167.9-billion Comprehensive Rehabilitation and Recovery Plan signed on October 29, 2014, by President Aquino will translate to con-crete benefits and truly aid in the recovery of Yolanda survivors. “Almost one year after the Yolanda disaster, the death toll remains unclear. While President Aquino fired a police of-ficer for predicting substantially more ca-sualties than President Aquino’s estimate of approximately 3,000 deaths, many be-lieve that the police officer’s estimate is

closer to the truth. The National Disaster Risk Reduction and Management Council [NDRRMC] confirmed 6,300 deaths as of April 17, 2014. There were claims that the fatalities could reach 18,000. As of No-vember 2, there were reports that there are remains of those killed that are still being recovered,” the resolution said. November 8 marks the first anniversary of the catastrophe wrought by Yolanda, that affected 171 towns in 14 provinces and six re-gions. Thousands were reported dead, millions of families were affected and damage was esti-mated at billions of pesos. The lawmakers, citing the research group IBON in its October 23 report, said that out of the 1.5 million families affected, only 215,471 families have benefited from Cash for Building Livelihood Assets projects; only 44,870 fisher-men were provided fishing gear and 32,081 had their bancas replaced or repaired. They added only 4,507 seaweed farmers were assisted; only 9,149 farmers were provided farm implements, 2,482 farmers given seeds and 160 farmers helped with animal restocking. Just 27 public markets out of the target 132 have been repaired or rehabilitated. “Just 58 kilometers of farm-to-market roads out of the target 315 kilometers have been rehabilitated or constructed, while only 5.8 kilometers of national roads have been re-

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Friday, November 7, 2014 A3BusinessMirrorThe Nation

paired or rehabilitated out of a target 116 kilo-meters, three bridges out of a target 34 bridges. Only 213 classrooms have been repaired out of the target 19,648 classrooms, while only 13 health facilities have been rehabilitated,” the resolution said. The resolution added that aside from the billions of donations and funds allocated in the General Appropriations Act, the govern-ment, in January 2014, allotted a P14.6-billion supplemental budget for the communities af-fected by Yolanda. “On the 100th day post-Yolanda, survivors under the People Surge demanded, among oth-ers, the P40,000 immediate financial relief per affected family. Last July, Department of Social Welfare and Development [DSWD] officials in Eastern Visayas announced that survivors could begin to file applications for P30,000 worth of shelter kits or cash per family to help them rebuild their homes. Yet, some survivors claimed that they have not received the P30,000 in cash or in the form of building materials,” it said. The lawmakers, citing Commission on Audit 2014 Special Audit Report on Typhoon Yolanda Relief Operations, said that out of the P740 million donations the government received as of December 31, 2013, only P3.8 million has been used, leaving P736 million unutilized. “The Office of Civil Defense and NDRRMC had a total of P692.77 million in available quick- response funds for 2013, and P48.82 million in donations, respectively, but not a single centavo of these amounts reached the typhoon victims, because government offices used them up for operations or kept them in banks,” the resolu-tion said. They also said that as of November 3, 2014, the DSWD posted on its web site that local do-nations totaled P98,504,441.87, while foreign donations reached $23,784,101.78. Social Welfare Secretary Corazon Juliano-Soliman, meanwhile, was quoted in news re-ports that 90 percent of the donations have been utilized.

House asked to probe slow Yolanda rehab

By Jovee Marie N. dela Cruz

ONE year after Typhoon Yolanda struck the Visayas, two party-list lawmakers on Thursday sought an investigation by the

House of Representives on the slow rehabilitation efforts and disbursement of supplemental funds and donations, as well as the failure of the admin- istration to determine the actual death toll.

NDRRMC chief seeks widerinvolvement in disaster response

Charges filed vs kidnappers of 2 Germansboosted by ransom admission–Natl Police

PAMA: “I believe that key to a successful DRRM

[disaster-risk reduction and management]

system does not rest with the NDRRMC and

the government alone. It calls for the proactive

cooperation of the entire nation.”

P354.7 billion. “But, more recently, we have noticed that the impact of disasters have been more devastating. Three days from now, we will be marking the first anniversary of the landfall of one of the strongest ty-phoons ever recorded in history that hit the country, Typhoon Yolanda, which caused heavy losses in terms of human lives, se-vere suffering and massive destruction of properties. That experience gave us a lot of painful experiences and valuable lessons, to say the least,” Pama said. The NDRRMC head said added drilling into the minds of Filipinos that disaster- risk reduction is “the new norm” is the most important challenge that his office is currently facing. “People have yet to accept that, first and foremost, they are responsible for their own personal well-being in times of disasters. There is a need to change the mind-set that you, as an individual, will not be a victim of disasters. Personal and family disaster preparedness should be promoted and practiced at a community-based level,” he said. “DRRM is not a trend nor is it a pass-ing interest. It should be a way of life and everyone can and should do something. Individuals should participate in drills and trainings, and know the hazards in their community and where the evacua-tion areas are located,” he added. On the part of the local govern-ment, while there is already an exist-ing law that allows or even mandates local officials to automatically allot a portion of their town’s yearly budget to DRRM, some of them were not keep-ing to implement it. “There is still a prevalent and mis-taken notion that DRRM is a national government responsibility and that they continue to rely on the national govern-ment for assistance in times of disasters,” Pama said. “It is understandable that some local governments cannot do it on their own, especially for less progressive localities which, despite their willingness to invest in greater DRRM initiatives, are restricted from doing so due to the limited availabil-ity of human and budgetary resources and their reliance on their Internal Revenue Allotments,” he added.

BusinessMirror news@businessmirror.com.ph A4

Economy

The Saudis’ unexpected move on Monday to cut prices to the US, aimed at protecting their market share there, will exacerbate those conflicts—weighing on the market and hurting most other Opec members economically.

“At the end of the day, this is still the Saudis’ cartel for better or worse, and for smaller members this is definitely worse,” says oil analyst Phil Flynn, alluding to the fact that despite Opec’s credo of consensus and unity, the organiza-tion is de-facto controlled by its top producer.

The prime motivator for the Saudis is to compete against US shale oil. But John Hall, chairman at Alfa Energy, sees other benefits for the desert kingdom.

Russia, which competes with Opec, is already hurting from low oil prices and Saudis are tightening the vise—“seizing the opportunity to reduce prices, hit Russia and hit Iran in one go,” he says.

When the cartel meets later this month to discuss how to manage the recent market slump, tensions are likely to fly high—and hopes for concerted action are low. Flynn calls the current price slump the “biggest threat [to Opec’s unity] since oil hit the $10 range” 15 years ago.

The price of crude hit three-year lows on Tuesday on news of the Saudi move. On Wednesday the benchmark New York contract recovered only slightly to trade just above $77 a barrel. The international grade of crude also hit multiyear lows.

These levels are manageable for the Saudi government, as its coffers are well padded and its oil production costs are relatively cheap.

Not so for many others within the 12-nation oil-produc-ing organization with higher extraction costs and national budgets dependent on higher crude revenues.

Even without the Saudi price discounts, Iran’s ability to export oil was slashed by international sanctions imposed over its nuclear program. Tehran, which once hoped to displace the Saudis as Opec’s top producer, has seen its oil revenues nearly halved as a result.

If sanctions were to be lifted as part of a nuclear agree-ment later this year, Iran still would need prices close to $140 a barrel to finance the government budget. Crude export revenues finance more than 50 percent of the gov-ernment’s outlays. AP

The peso consistently weak-ened throughout the week, having closed lower to 44.9 per dollar  on Monday.  Thursday’s  closing rate was its weakest in eight months or since March 27 when this stood at 45.04 per dollar.  Economists attributed the peso’s slide to the dollar’s strength against the world’s currencies as local out-put growth in the US continued to strengthen.  “The dollar continues to regain its prominence in the world market, all the more so with economic data printing on the positive side and with the Republicans securing both the lower and upper house of the legisla-tive,” Bank of the Philippine Islands (BPI) economist Nicholas Antonio Mapa told the BusinessMirror.  “With the continued rise of the greenback in the global markets, the USD/PHP closed weaker. This now puts the 45.50 at risk,” BDO Unibank Chief Market Strategist Jonathan Ravelas said. As the dollar gains strength and pressure on the peso escalates, US interest rates need to adjust upward to moderate the pace of US expan-sion, adding fuel to the compulsion for foreign capital to leave and head to where the returns are higher. Economists refer to the outmigra-tion of foreign funds as capital flight, one that cost the Philippines more than $1 billion in January this year alone.  Mapa also said the local currency betrayed a tendency to weaken early on this week and might have pushed past the psychologically important 45 per dollar if not for the interven-tion of the central bank, the Bangko Sentral ng Pilipinas (BSP).  BSP Governor Amando M. Tetang-co Jr. said earlier this week the BSP will “maintain its presence” in the foreign exchange market to ensure against excesses at the local currencies market.  “The market has been testing the 45 level for the past few days with only one or two trades getting through with the BSP staunchly defending that level…. After seeing the overall

trend was for peso depreciation, the BSP may have stepped back from in-tervention and let the USD/PHP move past the 45 handle,” Mapa said.    “The BSP continues to do its job to smooth out sharp fluctuations in the spot market.  Given that there was a more concerted run up to 45 today, the currency pair finally broke through. BSP always thrives to smooth out trends but never to reverse them,” he added.  The peso had been showing weak-ness since October this year follow-ing the US Federal Reserve’s hawkish remarks on its own monetary policy after the world’s largest market showed signs of more stable growth than had been observed since the global financial crisis in 2008.  The US Fed bared plans to ter-minate its quantitative-easing program this month and keep its short-term low interest rates low for a “considerable” amount of time still, presumably till mid-2015 as economists predicted.  Reflecting on these developments, Moody’s also said with US growth gaining more traction—a develop-ment that will compel interest rates to lift in the months ahead —will create global headwinds and gener-ate volatility in emerging markets.  “For emerging market economies, the effects of a rise in US interest rates will create some headwinds that the looser policies in the euro area and Japan will only partially offset. These emerging economies will have to contend with greater volatility,” Moody’s said on Thursday.  While the fall of the peso  on Thursday  supports Moody’s con-cerns, the international credit watcher also warned that the said vulnerability can also seen through capital outflows as US yields rise.    “However, as last year’s ‘taper tantrums’ demonstrated, country-specific reactions are likely to be temporary and conditional on poli-cies, either existing or expected, and on the existence of buffers,” Moody’s added. 

By Roderick L. Abad

CALIFORNIA-BASED outsourcing firm TaskUs is preparing for the looming power shortage in the country in the summer months of next year. 

Bryce Maddock, TaskUs founder and CEO, told the BusinessMirror that the projected lack of supply of electricity in 2015 is a challenge that not only the business-process outsourcing (BPO) industry will be facing but the entire nation, as well. It was noted that Energy Secretary Carlos Jericho L. Petilla made a projection that the increase in demand from 8,717 megawatts (MW) for 2014, to 9,011 MW during the first half of next year will require about 400 MW to 500 MW generating capacity to supply the increased power requirements in Luzon.  “The rolling brownouts next summer—that’s very concerning for us,” he said. “It should be addressed as soon as possible.”  Maddock said that TaskUs is now bracing for the energy shortage by investing more in generators to back up their operations. He did not disclose, however, how much the com-pany is spending for these equipment to ensure the

smooth and continuous operation of their business come the expected power outages and interruptions by next year.  TaskUs currently has two offices in Bacoor, Cavite, and Bonifacio Global City, Taguig. It provides e-mail and phone customer services, as well as back office for content moderation, photoshop, and data entry, among other types of work.  The combined full-time employees based in the US and the Philippines has grown to 1,200 to date, serv-ing clients from the US, Australia, Canada, the United Kingdom and Germany. While he conceded that the company spends a lot on power and Internet connectivity here than in the US, the country’s cheaper yet competitive pool of work force makes them continue to invest for further local expansion. “So its a trade off between those two things,” the top executive said. “Talent in the No. 1 factor why we’re bullish on our Philippine operations.” Upbeat on the continued growth of the BPO sector, TaskUs is investing $25 million in the country over the next three years to expand its footprint with the end goal of increasing its work force to 10,000 and growing the business by more than 100 percent annually. 

The Biofuels Act of 2006 requires the use of clean alternative fuels such as ethanol mixed with gasoline that is expected to save the country P35 billion in annual oil imports. This means that oil firms are mandated to sell unleaded, premium and spe-cial gasoline products with at least 10-percent ethanol blend. However, local production of ethanol is no longer enough to keep up with demand that is why local oil firms resort to importation. The catch: Ethanol blended gaso-line is more expensive than imported ethanol. Local ethanol is priced at P50 per liter versus P33 per liter for imported. This means that local ethanol is more expensive than gaso-line which is around 46 per liter even with the 12-percent value-added tax and a specific tax of P4.35 per liter. “Ethanol production in the Philip-pines remains scarce and oil compa-nies will have no choice but to source overseas to comply with the govern-ment’s E10 [10-percent ethanol blend in gasoline] requirement for gaso-line,” an industry stakeholder said. According to the latest study of the United Nations Conference on Trade Development (Unctad), the country sources around 70 percent of its ethanol requirement abroad. In 2012 according to Unctad, the coun-

try produced only 85 million liters of ethanol, or merely 30 percent of the total local demand. Unctad added that the country’s supply of imported ethanol may even be in danger as Thailand, which used to be its biggest source, is now con-centrating on its domestic market. Thailand has more than doubled its ethanol consumption in the last six years since it implemented its 10-year Alternative Energy Devel-opment Plant that aims to increase its use of alternative energy from 9.4 percent of its total energy consump-tion currently to 25 percent by 2021. With most of the oil companies’ ethanol requirements sourced over-seas, the Biofuels law passed nearly eight years ago has failed to achieve some of its major goals which is to lessen the country’s dependence on high-priced imported fuel, create economic opportunities and spur countryside development. “Local production is not enough even at 5-percent ethanol blending for total annual gasoline volumes. What more at 10 percent of vol-ume? Ever since the Biofuels law was passed in 2007, oil companies have been importing ethanol to comply with the government’s mandate. How are we helping farmers when we import 70 [percent] to 80 percent

Saudi. . . continued from a1

Peso. . . continued from a1

Friday, November 7, 2014 • Editors: Vittorio V. Vitug and Max V. de Leon

of our ethanol requirements abroad? Despite a captive market, local pro-duction is grossly insufficient. We are basically replacing imported gasoline with imported ethanol,” another oil industry source commented. Recent studies also show that use of ethanol in gasoline is actually making motorists pay more for every kilometer that they travel. No less than the US Energy Infor-mation Administration (EIA) said that the energy content of ethanol is 33 percent less than “pure” gaso-line, which means that fuel, blended with ethanol will drive fewer kilo-meters. And the higher the ethanol content, the less fuel efficient a liter of gasoline is. According to the EIA, vehicle fuel economy may decrease by up to 3.3 percent when using E10, a fact the Department of Energy (DOE) must have overlooked when it mandated the increase in ethanol blend from 5 percent to 10 percent. With E10 nearly two liters for every 50 liters of gasoline is actually wasted while on the road, whether motorists are in traffic or not. This means mo-torists have to pay nearly P100 more for every full tank in additional cost to make up the inefficiency. In the long run, many motorists will also be saddled with the cost of repairing their cars because of corro-sion problems. Ethanol aggressively at-tracts water and can corrode fuel lines, fuel pumps and carburetors. Studies conducted by car manufacturers have showed that carbureted engines and vehicles old or new may have compat-ibility issues with the use of E10. “Despite these facts, why is the government insisting on the E10 blend and we have even heard some moves to further increase the etha-

nol blend in gasoline. Who is really benefiting from this? As far as we know, only local producers, traders, and ethanol producing countries are getting rich from the Biofuels law. Maybe it’s time to revisit this,” industry stakeholders said. More investmentsWHILE the DOE does not deny that local ethanol production is, in fact, running out, it, however, stressed that this is a clear sign that more ethanol plants should be put up to catch up with the rising demand. Energy Director for Renewable Energy Management Bureau Mario Marasigan said the country’s local ethanol production remains “insuf-ficient” even with new ethanol plants going on stream by next year. However, calls to revisit the law will not solve the problem but invest-ments will. “Why revisit the law? We need investment. So, we have to invite more private-sector participa-tion,” Marasigan said. Separately, Energy Secretary Carlos Jericho L. Petilla, in a text message, said that, while it may be prudent to review existing laws the current investments made by the pri-vate sector on this industry should be taken into account. “The fact that we import ethanol should be a trigger for local companies to put up bioethanol plants. This was after all part of the goals of the law to promote local production of fuel,” Petilla said, when sought for comment. The DOE has been issuing warnings way back last year about an impend-ing shortage of ethanol. Estimates from the DOE showed that around 80 percent of ethanol supply is sourced abroad, while the remaining 20 per-cent comes from local producers.

Pricey ethanol may prompt review of 2006 Biofuels law

By Lenie Lectura

The costly of local ethanol, as well as the scarcity of ethanol production in the country now

raises the question if there is a need to revisit the eight-year-old Biofuels law.

BPO company maintains expansion target despite projected energy shortage in summer of next year

Friday, November 7, 2014 A5BusinessMirrorEconomy

The Manila Electric Co. (Meralco) said on Thurs-day that the decline in generation charge is the low-est for the year. This month’s decrease was primarily due to the improved availability of power plants and lower cost of fuel for the supply month of October. The Malampaya gas facility, likewise, did not experience any supply restriction. It will be recalled that last month’s generation costs in-creased mainly due to a cumulative five-day Malampaya restriction (from September 8 to 11 and from September 21 to 23), which reduced the fuel supply to Ilijan and forced the First Gas plants to use more expensive alternative fuel. With less incidences of simultaneous forced outages of power plants, the secondary-price cap at the Whole-sale Electricity Spot Market (WESM) was not triggered during the October supply month and WESM charges registered a reduction of P25.61 per kWh. Charges from independent power producers (IPPs) and power-supply agreements (PSAs), meanwhile, registered reductions of P0.54 per kWh and P0.03 per kWh, respectively.  In terms of share to Meralco’s total power require-ments for the October supply month, WESM, IPPs and PSAs accounted for 5 percent, 47 percent and 48 per-cent, respectively. Contributing also to the overall downward adjust-ment in the bills to households is the P0.083 decrease in the transmission charge. This was due to the lower ancillary service charges. Taxes, meanwhile, registered

a P0.056 decrease per kWh. There was also a cumula-tive decrease of P0.026 per kWh in subsidies and the system-loss charge. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and trans-mission charges. Payment for the generation charge goes to the power suppliers, such as the plants selling to Meralco through the WESM and under the PSAs, as well as the IPPs. Payment for the transmission charge, meanwhile, goes to the National Grid Corp. of the Phil-ippines. Of the total bill, only the distribution, supply, and metering charges accrue to Meralco. Aside from the reduction brought about by the lower rates, customers can further reduce their elec-tricity bill through Meralco’s energy saving tips for this Christmas season.   For those who are thinking of buying Christmas lights, they may consider buying the LED type. Although relatively more expensive than the conventional Christ-mas light, the LED type is more efficient in terms of power use.   Based on tests made at the Meralco PowerLab, LED Christmas lights consume P56 less per month for every strand holding 100 bulbs compared to the convention-al type. LED Christmas lights also last 49,000 hours longer compared to their ordinary counterparts. And because they are made of plastic, they do not generate as much heat. Lenie Lectura

By Catherine N. Pillas

ThE president of France is expected to embark on his first state visit to the Philippines next year with improving trade relations included in his agenda,

according to the French ambassador to the Philippines. Ambassador Gilles Garachon told reporters at the side-lines of the French-Philippines United Action media briefing that the incumbent French executive head of state, François hollande, will visit the country in 2015, which marks hol-lande’s first trip to Southeast Asia during his term. The envoy added that trade ties between Manila and Paris will not be affected significantly by reported plans from Philippine Airlines to review the carrier’s order of aircrafts from French firm Autobus.  “The state visit will be in the first semester but we have not decided on a date yet...this shows that we want to be closer to the Philippines. The very fruitful visit of your President [Aquino] in October allowed for the visit of the French president. The visit is to have more substantial political, economic, and multicultural relations with the Philippines,” Garachon said.  Garachon said, on the economic front, that although the

Philippines and France enjoy a €2-billion bilateral trade, this can be further improved from both sides.  Reports of PAL’s plans to adjust its order of aircrafts from French company Airbus will unlikely drag down bilateral trade growth Garachon said, although the Philippines’s imports may decrease due to the possible scaling back of PAL’s aircraft purchase.  Garachon said he is not privy to the talks between the two carriers but said there is “there is plenty of room” to offset the impact on overall trade.  Given that aircrafts are the top imported commodity of the Philippines from France, Garachon stressed the need for the Philippines to maximize its other strengths in exports, such as food and beverage, furniture and elec-tronics, and, likewise, for the French to be more receptive to Philippine exported goods. “I think we have plenty of room to offset the possible decline because of the aircrafts but we have to increase the rest, we, the French, have to buy more from the Phil-ippines,” Garachon said. Foreign trade data from the Philippine Statistics Author-ity for the first semester showed that the European Union accounted for 11.4 percent of the country’s total external trade in goods, or $7.004 billion of the total $61.264 billion. 

By Ma. Stella F. Arnaldo Special to the BusinessMirror

THE Department of Tourism (DOT) on Wednesday took its marketing campaign for the Philippines a step further by tapping

digital and social-media platforms. In a news statement from London, Tourism Promotions Board (TPB) COO Domingo Ramon Enerio III said the new campaign will be undertaken by the Global Tourism Interface (GTI) network, a group of marketers from around the world, with the aim of increasing visitor arrivals in the Philippines from key destination markets like France, Italy, Spain and the United Kingdom.

“Each market will set up digital press offices and create individual social-media pages on Facebook, Twitter and Instagram to engage with a wider audience. The strategy will also include forging relationships with bloggers to reach influential sites on travel, food and the lifestyle sectors,” he added.

Formerly the Philippine Convention and Visitors Corp., the TPB is the marketing arm of the DOT. It signed the partnership with GTI on the sidelines of the ongoing World Travel Market (WTM).

The DOT is keen on developing Europe as a key market for tourists as its travelers stay longer and spend more during their overseas

holidays and trips.The agency is targeting to attract some

500,00 Europeans to travel to the Philippines this year, of the total visitor arrivals target of 6.8 million.

The digital campaign will also include sponsored trips for bloggers to further increase the Philippines’s online presence. “This will include an inaugural ‘Jeepney Roadtrip,’ where an influential blogger from each target market will travel across the Philippines in a jeepney, an iconic vehicle of the islands,” Enerio said.

Other activities include the placement of advertisements in Facebook and co-branding with relevant trade partners in each market. In addition, the campaign will be engaging in the travel industry on joint-promotional activities to drive point-of-sale and actual bookings to the Philippines.

“We know that many people research their holidays online now and we want to target our possible customers and give them the best and most up-to-date news about our islands. Additionally, we love the idea of visitors taking their own images and sharing them with other followers of our channels,” he stressed.

“We also look forward to working with bloggers whose honest accounts of their travels give their subscribers and followers great pleasure

and provide lots of source information and tips for travelers to inspire their research.”

The four-day WTM opened at the International Exhibition and Convention Center (ExCel) in London on Monday (Tuesday in Manila) with the 155-strong Philippine delegation trumpeting Visit the Philippines Year 2015.

The 300-square-meter Philippine Pavilion has a power-branding design focusing on individual destinations like Metro Manila, Coron/Busuanga in Palawan, Cebu, Bohol, Camarines Sur, Davao del Sur, Samal Island, Camiguin, Siargao, Zamboanga City, the Banaue Rice Terraces, among others. Nine local government units, as well as 35 private-sector partners and other co-exhibitors like pioneering flag carrier Philippine Airlines and Huma Island Resort and Spa in Palawan are also participating in the event. “The World Travel Market is clearly an event that matters a lot in terms of generating tourism business for Philippine travel industry partners and creating awareness about the Philippines as a fun tourism destination,” the TPB chief said. The WTM is an annual event held at ExCel which expects about 50,000 senior travel industry professionals, government ministers, and international media this year. In 2013, WTM generated more than $3.52 billion in travel industry contracts.

Lower generation charge seen to reduce November power bill for Meralco customers

Generation charge, the biggest component of power consumers’ monthly bill, went down to P5.11 per kilowatt-hour (kWh) last month. this

led to a reduction of P0.41 per kWh in november power bills for a typical household consuming 200 per kWh, equivalent to a decrease of around P82 in the bill.

French leader Hollande expected to visit Manila next year–envoy

Tourism dept ties up with intl marketing group to boost PHL’s online presence

By Lenie Lectura

Editor: Alvin I. DacanayFriday, November 7, 2014

OpinionBusinessMirrorA6

Want milk? Call PHLeditorial

THE Philippines is not a major or even a minor player in the global milk business. Dairy cows do not thrive or produce milk efficiently in a tropical climate such as ours.

But if you are in the United Kingdom and you want to buy milk, you may have to do business with the Philippines first.

The Dairy Crest Group is a publicly listed British company formed in 1981 that is among the leading dairy-product busi-nesses in Europe. Last year its revenues reached $2.2 billion. It employs 4,500 people and buys milk from some 1,100 dairy farms. It sells about 1.3 billion liters of milk each year, as well as cheese and other dairy goods. To put that last figure in perspective, that is about half of the amount of beer that San Miguel Corp. sells in the Philippines each year.

Before the advent of pasteurization, milk had to be bought almost daily to avoid spoilage and, for many years, people had milkmen deliver it to their homes every morning. They usually placed their orders by either leaving a note in empty milk bottles that were left outside their doorstep or by talking to their milkman directly. For some of them, they could even call their local milk-distribution center and place their order the night before and, upon delivery, pay for it in cash.

Last week Dairy Crest informed many of its customers that they would be now placing their orders through a call center in the Phil-ippines. This came after the company discovered that 60 percent of calls to its local branch went unanswered. Naturally, this left many of its customers unable to place their milk orders the night before.

Of course, there have been some negative reactions. The advan-tage for the customer is being able to get someone to take his or her order and being able to pay for it over the phone. While the online order-and-payment system is still in place, that system prefers the customer to set standing orders for delivery every two days or so.

The next complaint customers made after Dairy Crest did away with “at the door” ordering is this: Why didn’t it just hire more people to answer the local calls? The company may have declined to comment on that, but we all know the answer to that question.

Filipino call-center agents always answer the phone, and Dairy Crest just reported annual earnings that were below expectations.

Welcome to the global dairy business, Philippines.

EARLIER this week, the United States held midterm elections that, as of this writing, seemed on track to hand Republicans an overwhelming majority in Congress. What that means

for Filipinos is something that will be discussed more thoroughly by others in the coming days. For now, however, what I find most interesting and relevant is how modern technologies have been impacting voting in the US, in both good and not-so-good ways.

I HAVE met her twice this year: The first time, when we were both judges at the Agency of the Year Awards; the second, when she became our speaker at a recent Management Association of

the Philippines (MAP) forum. On both occasions, she maintained her humble and unassuming ways. You could actually mistake her for one of the non-governmental organization-affiliated women in the audience, as she exuded an aura of leadership, but without any pomp or glitter.

The highs and lows of modern elections

Drop-dead money

First, the good. On the morning of election day,

thousands of students got a text mes-sage reminding them to vote and tell-ing them where they were supposed to do just that. The message didn’t come from any political party or candidate, but from a nonpartisan digital service that sends personalized reminders to its registered users. It’s a great idea that was implemented for free and that, obviously, has great potential in boosting voter turnouts. Here at home, where election day doesn’t have a snowball’s chance in hell of slipping past unnoticed, this kind of service might be useful, not so much for the reminder, but for that last crucial bit of motivation to actually get engaged in the political process.

Social networking isn’t getting left out of the picture, either. On election day, Facebook placed a ban-ner on top of the feeds of American users, reminding them to go vote and urging them to share it with their friends, making the act of vot-ing a truly communal experience. It isn’t far-fetched to assume that the same functionality made available in the Philippines would be embraced wholeheartedly by Filipinos.

And now, the not-so-good.Throughout the US, it seems that

the most prevalent election problem had to do with people not being able to access their registration records, or find their names on the voter rolls. In Colorado, for example, the system that verified the eligibility of voters

requesting ballots crashed repeat-edly. This forced voters to fill out provisional ballots. The same thing happened in Georgia, Texas and Flori-da. These crashes—along with other causes, such as misdelivered lists of voters, undelivered ballots and tardy poll workers—resulted in the exten-sion of voting hours. Sound familiar?

Worse—we Filipinos might con-sider this downright catastrophic—voting machines and systems were showing up buggy. In California, for instance, election websites were so glitchy that voters had to be redi-rected to other polling places.

It was a different story in Virginia, where more than 30 voting machines—employing the direct-re-cording electronic (DRE) technology that the Commission on Elections (Comelec) will be rolling out in a pilot test area in 2016—seemed, at first, to play favorites.

As seen on a video that has already gone viral on the Web, the affected voting machines record a vote for the Democratic candidate, even though the voter clearly and repeatedly selected the Republican contender. In North Carolina the voting machines swung the other way, converting votes for Democrats into votes for Republicans. Fortunately it wasn’t all bleak. In many cases, the switch-ing of the votes was determined to have been caused by “calibration

errors,” which were promptly cor-rected through reprogramming.

Not having seen any of those tech-nical reports, but not being a total stranger to poorly made touch-screen games either, I can guess that a “cali-bration error” probably means that the active portion of the touchscreen didn’t accurately correspond to the information it displayed.

In a sense, that would make the problem analogous to the troubles we had with “misaligned ovals” in the au-tomation of elections in the Autono-mous Region in Muslim Mindanao in 1998. Back then, because the ovals were misaligned during ballot print-ing, the counting machines wrongly attributed votes for one candidate to another. In 2010 we almost saw a repeat of that problem when the entire back page of the ballot was re-designed, and the new layout wasn’t reflected in the counting program of the precinct count optical scan (PCOS). Fortunately, that issue was caught ahead of election day, and af-ter a gargantuan effort to replace the PCOS compact flash cards, the elec-tions were able to proceed on time.

Without a doubt, these cases are red flags for the Comelec to be dou-bly wary of when it rolls out its DRE pilot test in 2016.

James Jimenez is the spokesman of the Commission on Elections.

This woman is Rep. Maria Leonor “Leni” Genora-Robredo of the Third District of Camarines Sur province. She may look simple like a volunteer public attorney or an advocate for women’s rights, but as she spoke, she made everyone realize that she means business. And her business is to work for women’s economic empowerment. She gave examples of how local government units can help female entrepreneurs: by get-ting catering services from women’s groups, by devoting 10 percent—yes, 10 percent, and not just 5 percent, as required by law—to the gender and

development budget, by putting up women centers and more.

She has worked as a public servant for most of her life. But she believes there is much work to do as a law-maker. She can advocate for laws that will empower women financially. She can probably interpret the  Magna Carta for Women, so it can be more useful to many. She has seen many women go back to a life in domestic violence because they have no means to make a living. Thus, financial independence is key.

In the MAP forum, our first speaker was corporate director

Mercy Corrales, who has served in top positions in Starbucks Japan and Levis International. She ad-vised women to have “drop-dead money.” This is money kept in sav-ings for female employees, man-agers and corporate leaders. She believes that a woman can stand alone if she has savings and does not need a job out of desperation or because she has to pay her bills. This way, she can tell her boss to “drop dead” and opt out of a diffi-cult work situation.

Both woman-leaders share the same advice: financial independence or financial empowerment. And this can only happen if everyone did their part in the following:

n Making women, especially rural and uneducated women, finan-cially secure.

n Buying from women’s groups, women suppliers and women-led companies.

n Working with local govern-ments to empower women’s groups in the community.

n Giving women an education, so they can have choices in life.

n Think of diversity in your com-panies, both in management and in the board room. Not all boards have to be “all male.” Not every industry

must be male-dominated. It is not about equality; it is about diversity.

n Do help women make their economic plan and work toward their financial independence, empower-ment and having drop-dead money.

This will make a truly happier and sustainable society.

Chit U. Juan is a founder and owner of ECHOStore sustainable lifestyle, ECHOmarket sustainable farms and ECHOcafé in Serendra, Podium, Cen-tris Quezon City mall and Davao City. She is also the president of the Women’s Business Council of the Philippines and of the Philippine Coffee Board Inc., two nonprofit organizations that are close to her heart. She often speaks to corporates, young people and non-governmental or-ganizations on social entrepreneurship, women’s empowerment and coffee. Fol-low her on twitter.com/chitjuan or find her on Facebook (Pacita “Chit” Juan). E-mail her at puj@echostore.ph.

This article reflects the author’s opinion and is not the official stand of Business and Professional Women (BPW) Makati. Women Stepping Up is a rotating column of members of BPW Makati and comes out twice a month.

For more information on BPW Makati, visit www.womenstep-pingup.org.

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spoxJames Jimenez

Women stepping UpChit U. Juan

Friday, November 7, 2014

OpinionA7BusinessMirroropinion@businessmirror.com.ph

OMERTAButch del Castillo

AnnOTATiOnsTito Genova Valiente

TOMORROW, November 8, the nation will mark the first anniversary of the day Supertyphoon Yolanda (international code name Haiyan) slammed into the

country with such a nightmarishly destructive force that many Filipinos will long remember.

THERE are difficulties in languages and their use. There are the rules, and there are the sounds of language. Again, we users of languages can always come to a quick decision on

whether a word is proper and the sound is recognizable. If there are more complicated debates about certain languages, the grammarian can always reduce the debates to what is right or wrong, following a dominant ideology on languages.

Yolanda’s fury in hindsight

When laws limit languages

Thousands of survivors are expected to visit the mass graves, into which thousands of bodies—many of them unidentified—had to be unceremoniously dumped as a defensive move to protect the public from contagion.

Yolanda, considered the most powerful weather disturbance to hit the world in 2013, devastated most of Eastern Visayas and affected some 16 million, or about 3.4 million fami-lies, in nine regions of the country.

It must have easily left in its wake more than 10,000 dead, but the official death toll stopped at 6,300 six months ago. It stopped even as the body count being undertaken by the National Disaster Risk Reduction Management Council (NDRRMC) continued unofficially.

It’s still fresh in the public’s mind that, for some strange reason, Presi-dent Aquino flared up when Chief Supt. Elmer Soria, the police direc-tor of Eastern Visayas, told the me-dia that the casualty count exceeded 10,000.

P-Noy told a Cable News Network interviewer that he didn’t think it was that high, and that the death toll might be closer to 2,500. You know what subsequently happened after that interview? Soria was removed from his post and put on floating status.

From then on, the NDRRMC, apparently afraid to make a liar out

of the President, has been hiding the true casualty count from the world, like a closely guarded state secret.

When Yolanda struck, the sources of livelihood of 6 million agricultural workers (in the coconut and fishing industries) were wiped out. Some 2.6 million of them were already living on or below the poverty line.

After Yolanda struck, agricultural income dropped 50 percent to 70 percent, according to a study by the IBON research group.

Tomorrow it would be a full year since its deadly storm surges en-gulfed and crippled the entire city of Tacloban, the capital of Leyte province. It would be interesting to know to what extent it has recovered or risen from the muck into which it was so mercilessly shoved.

Many are saying the national gov-ernment’s inept initial responses to Yolanda’s aftermath showed the kind of political leadership that we have.

“Yolanda proved to be a publicity nightmare for the government. It exposed an inefficient bureaucracy compounded by politics, according to critics.” This quote came from a story from The Philippine Star on the alleged lapses in the government’s response to Yolanda a year ago.

Deeply etchedTHOSE lapses are deeply etched in the public’s memory. For example, it won’t be easy to forget how Interior

Over television and media tran-scripts, language and its material component, in the form of words and sentences, have come to a gridlock. Partly to blame are lawyers, and part of the problem are politicians, which does not make a lot of difference. Many politicians are lawyers and there are many lawyers, who think like politicians. Or there are lawyers whose destiny, it appears, is to be-come politicians or to aid politicians.

Can you read my bias in there?

Many years ago, in a dormitory for foreign students, Filipino stu-dents—this writer included—had a long debate about the Philippines’s state of affairs. To those who have stayed abroad, this attitude of being intensely concerned about the state of affairs of our poor nation has become second nature. We become officious and proprietary. I have at-tended forums where I had heard students and cultural workers talk about “my people,” with reference to

Secretary Manuel “Mar” Roxas II (in the company of the Chief Execu-tive) behaved toward Mayor Alfred Romualdez of Tacloban one morning after the storm.

The long and short of it was that Roxas tried to “persuade” Romualdez to tender his resignation so that the Department of the Interior and Lo-cal Government (DILG) could freely supervise relief and recovery opera-tions in the devastated city, backed by all the resources available to the national government.

Roxas even brazenly told Romual-dez: “Remember, you are a Romual-dez and he is an Aquino.” Romualdez, of course, refused outright and, in effect, dared Roxas to bring it on.

The heated conversation between the two was taped and made avail-able to the media.

The implication was that if Ro-mualdez didn’t resign, he could never expect the national government to go full throttle in helping Tacloban rise from the dirt.

This kind of distasteful politick-ing in the midst of a horrific disaster, I imagine, must have pushed south-ward the former senator’s sagging popularity rating by several notches.

But if there was anybody to blame at all for the high number of casu-alties and extensive destruction wreaked by Yolanda on Leyte and Eastern Samar provinces, it couldn’t be anybody else but Roxas himself.

Roxas is the NDRRMC’s vice chair-man on disaster preparedness. In the NDRRMC, the pecking order puts Defense Secretary Voltaire Gazmin as chairman; Roxas as vice chairman in charge of disaster preparedness; and Social Welfare Secretary Corazon “Dinky” Soliman as vice chairman in charge of disaster-response.

The whole country had been warned that Yolanda would be pack-ing more than 200 kilometer-per-hour gale winds. With all the resourc-es available to the NDRRMC, Roxas can’t possibly claim that he didn’t

know that Yolanda was a howler like no other.

Given this fact, the least he could have done was issue a mandatory or-der to evacuate residents from coast-al areas by 1 or 2 kilometers inland.

If he had only done that, or just publicly warned all shoreline resi-dents to seek higher ground, who knows how many thousands of lives he could have saved?

Normally, a town or city has the responsibility of implementing a forced evacuation of residents in endangered areas. But if it does not have the logistical resources to carry this out, it could always run to the DILG for help.

Except for its northern portion, which faces Samar province, Tacloban is surrounded by water. Thus, when the water level rose to as high as a three-story building, the storm surges literally engulfed most of the city.

In hindsight, Roxas would have needed 1,500 buses to move some 100,000 coastal residents to higher ground before the expected arrival of Yolanda. Also, he could have de-ployed as many policemen and sol-diers (courtesy of Gazmin) as neces-sary to maintain order in the evacu-ation centers.

And, in a rare display of leader-ship, he could have called in the Department of Social Welfare and Development to see to it that ample food, sanitation facilities and cloth-ing would be available to the refugees.

But, as they say, it is easier said than done. And hindsight always has a 20-20 vision.

Sayang.Roxas missed what could have

been a rare defining moment in his political career.

If he were only in Tacloban a few days before Yolanda struck, we might be talking more confidently of a Roxas—rather than a Binay—presidency being in the cards.

E-mail: omerta_bdc@yahoo.com.

the Filipino people. There is some-thing Mosaic about such a reference, and when someone finally utters the words, “my country,” you know the die is cast and one could almost see tribes wading across the Great Pacific just to liberate the Philippines from colonialism and corruption.

The discourse that killed the free-dom of languages is the series of ses-sions that look into the alleged over-pricing of government buildings in Makati City. At the center of it all is Vice President Jejomar C. Binay. But I will not go into that. Corruption, as a subject matter, has become so quotidian that it is already boring. I often wonder where I can find the 5 percent (or even less) of the workers who are not corrupt or have not yet been corrupted. There are two words in Filipino that come to mind: pala-sak and talamak. The first one means “commonplace”, or just all over the place; the second denotes something that is difficult to cure, or critical. But the meanings of the words are not what I would call your attention to, but the sound of the “ak” in both words. It brings about the hurt of a slap, the sense of lips closing over a toothless mouth.

Lawyers and politicians can mud-dle the simplest words expressing one of the most common ideas among human groups: ownership.

In the Senate a certain Antonio Tiu was invited because he claimed to be the owner of a vast tract of land worth more than P400 million. While being grilled, the businessman admitted to having paid a measly sum of P10 million or P11 million. He claimed that he owned the land. What is unusual about that? I know of many who are into the business of claiming lands in this country, even if they have not shelled out any money. That is called landgrabbing. We learned that in high school, where we memorized the late Sen. Raul Manglapus’s classic speech, called “Land of Bondage, Land of the Free.” The bondage has remained; the free-dom remains questionable.

If Tiu is not the owner, then what about those who sold the properties, which are now consolidated into an agricultural-tourism site? I do not know with you, but I do not think I would be thrilled with being a tourist in a farm. So what about the previ-ous owners who found out that the properties they sold still bear their name? In a world of nonlawyers, be-lieve me, they should get those lands back. But they are aghast because they no longer have any property in that town. The lawyers would tell us that the identity of the people paying the taxes for those properties would determine who is (or are) the owner (or owners). Scary prospect! Anyone can pay tax for anybody’s land, in this case. Scary lawyering, too!

A few days later, social media were littered with the Instagram post of one of Binay’s daughters that showed a picture of a pool in the contested hacienda. It bore this caption: “Our place in Batangas.” This time, even as I wink, the lawyers cannot imme-diately allege that the land is, indeed, Binay’s. In Fenella Cannell’s Power and Intimacy in Christian Philippines, she narrates how, during her field-work in Calabanga town, Camarines Sur province, she was surprised to hear poor women point to vast tracts of land as theirs. She would find out later that those claims were part of the joking tradition.

The sessions being conducted by the Senate are becoming a fodder for jokes in our land. In one of the legal tussles in the sessions, the notion of usufruct—from “usus,” or user, and “fructus,” or fruits, and defined by the free online encyclopedia as a limited right to benefit from the products of a property—was taken up. The next day, social media, par-ticularly Facebook, were filled with a new definition of usufruct: “use of rock.”

Use of rock—well, that makes more sense than all the gridlocks posed by lawyers and politicians.

E-mail: titovaliente@yahoo.com.

LABOR-MARKET institutions, which refer to all labor-market policies and regulations, influence economic dynamism by their impact on the supply of a key factor—skilled workers—to new

and expanding companies, and the shedding of workers from declining and failing firms. Growth-favoring labor-market institutions include portable pension plans and other job-tenure rights, health insurance that is not tied to the current employer, efficient collective wage-setting, and public-income insurance systems that encourage mobility and risk-taking. All these are measures of worker protection that fundamentally require government resources.

The coordination of labor marketsand institutions

EAGLE WATCHDr. Leonardo A. Lanzona Jr.

If imposed on the market, however, these measures can impede the workings of a deregulated labor market. Depend-ing on the approach, labor-market in-stitutions can either advance or impede this restructuring that is expected from economic growth. Overly stringent regu-lations tend to create a system in which a large share of economic activity occurs in small firms without the ability to grow.

There are several advantages in having the market, by itself, determine the labor-market outcomes. First, labor markets can presumably be organized to promote (potential) high-growth firms, especially through decentralized and individualized wage-setting, portable job-tenure rights, and insurance systems that encourage mobility and risk-taking. Second, high-growth firms are allowed to freely make decisions to create new jobs and induce economic growth. And third, continuous transformation and massive are pervasive characteristics of modern market economies.

There are disadvantages, as well. First, the deregulation of labor markets also has a negative side: It promotes in-security and may lower commitment to both employers and workers, which can harm efficiency. Second, deregulation has to be applied to the whole market. Deregulation of temporary contracts and staffing agencies cannot substitute for the already existing regulation of per-manent contracts that affect long-term commitments. Creating exemptions to microenterprises as a cover for deregula-tion will not be sufficient to offset the ef-fects of current regulations. Third, labor markets cannot be deregulated in isola-tion. Appropriate tax- and competition-policy measures can be justified and are also called for, especially in making sure that every member of society benefits from the economic development.

In the Philippines, for instance, employment in the formal sectors has been observed to put the young and in-experienced at a disadvantage, as firms would prefer the more educated and older workers. Based on last year’s labor-force survey, the unemployment rate of those belonging to the 15-to-19 and 20-to-24 age groups were 14.5 percent and 17.1 percent, respectively. These rates are at least twice the national unemployment rate of 7.1 percent. More important, this implies that a significant proportion of young people have decided to participate in the labor market and quit schooling. Hence, the institution of the Kindergar-ten to Grade 12 program and other school reforms aimed at creating a more produc-tive workforce will not work for students who may have already decided to work even before completing their education. In effect, school reforms and subsidies

are worthless if a substantial number of students are no longer interested in schooling for some reason or another.

Thus, apart from the anticipated increase in labor supply, the formation of human capital is weakened as young people decide to leave school early. The coordination of markets and institutions are, then, crucial in encouraging the con-stant renewal and growth of the human capital of the labor force.

In this situation, the government should offer tax incentives to encourage firms to give scholarships for short-term classroom training and on-site appren-ticeships, particularly for unemployed young people. Scholarship stipends can also be awarded, but should be set low enough to avoid discouraging the recipi-ents from searching for jobs.

For their part, the markets should create jobs that allow young people to work and attend school at the same time. That would offset the pressure to leave school immediately in bad times to compensate for a decline in house-hold income, and in good times to take advantage of a booming labor market. It would also be an effective way for firms to recruit highly qualified young people for potential full-time employment. To accomplish this, however, legal or regula-tory changes might be necessary to allow special contracts for young people who attend school—featuring flexible hours, below minimum wages and greater ease of firing or quitting. The responsibility of protecting workers should not rest on the firms alone, but, more appropriately, belongs to state institutions.

Key labor-market institutions and the policies that shape them, thus, affect the restructuring that markets create. Unfortunately, because of the mandate to protect workers, the institutions and the country’s laws are often intransigent and unresponsive to various market conditions, which are themselves prod-ucts of economic growth. In order to sustain growth and to maximize social welfare, these institutions should work alongside market forces, while provid-ing various innovative alternatives to protect workers.

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MEMBERS of the Philippine Economic Society are invited to attend its annual general assembly at the Hotel Intercon-tinental Manila in Makati City on No-vember 14. The theme of this conference is “Forging Ahead: The Philippines as a Developed Economy in 2050.”

Leonardo A. Lanzona Jr., PhD, is the director of the Ateneo Center for Economic Research and Development and a senior fellow of Eagle Watch, the school’s mac-roeconomic research and forecasting unit.

ON the eve of United States midterm elections that fo-cused on things that have

little substance, a United Nations (UN) panel issued another grim warning about what matters most of all: climate change.

The report from the Intergov-ernmental Panel on Climate Change that was released on Sunday said the burning of fossil fuels is causing at-mospheric changes that will bring droughts, floods, rising seas and intense heat. This, in turn, will lead to the extinction of wildlife, loss of crops and social upheavals caused by shortages of food and rising numbers of refugees.

“Continued emission of green-house gases will cause further warm-ing and long-lasting changes in all components of the climate system, increasing the likelihood of severe,

pervasive and irreversible impacts for people and ecosystems,” the report said.

Yet, for all the apoplectic alarms coming from usually cautious scientists, nations are not changing their energy policies broadly or fast enough to prevent a climate crisis. The reports said energy companies are spending $600 billion a year to find more coal and oil deposits. And even as the US and Europe try to limit emissions, developing nations are increasing them.

The US should use its advanced technological and economic lever-age to focus world attention on climate change. That effort can push forward when international delegates gather in Lima, Peru, in a month to set worldwide limits on emissions. The News & Observer (Raleigh, North Carolina)/TNS

Heed the UN’s climate alarm