BusinessMirror March 16, 2016

MEDIA PARTNER OF THE YEAR

UNITED NATIONS

2015 ENVIRONMENTAL MEDIA AWARD LEADERSHIP AWARD 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Wednesday, March 16, 2016 Vol. 11 No. 160

MARKET LEADERS VOW TO RAMP UP DOMESTIC PRODUCTION

Toyota, Mitsubishi seek perks under ₧27-B CARS ₧4.3B M B C N. P

ARKET leaders Toyota Motor Philippines Corp. (TMPC) and Mitsubishi Motors Philippines Corp. (MMPC) have moved to solidify their leadership in the domestic industry, as they formally submitted their application to the Department of Trade and Industry’s (DTI) P27-billion Comprehensive Automotive Resurgence Strategy (CARS) Program.

INSIDE

Mitsubishi’s initial committed invesTment to jack up its local manufacturing capacity

The two Japanese vehicle makers confirmed their application to the government’s auto-stimulus program—which grants perks to companies that will ramp up their S “P,” A

13.1 MILLION U.S. COASTAL RESIDENTS FACE FLOODING

P.  |     | 7 DAYS A WEEK

Far, far more than a scrapbook Free Fire Teddy Locsin Jr.

H

ERE it is, the book. I will not say, FINALLY, even if the book was supposed to come out on the 25th anniversary of the Firm. It did not. There was this and that snag. Not least the great writer died. His nephew Tony took over, and he took ill. And while the manuscript lay fallow the partners went over it, and took their damned time. Each found it lacking in this aspect or that of the Firm; the manner and context of its creation; and of its early to late development. Boy Laz observed that there was a great deal of Joycean stream of consciousness that needed to be cut out. Each partner insisted on his input, and the others insisted on theirs. And then, and this is the best part, they forgot all about it. So manuscript and new inputs were allowed to simmer together—typed pages and the handwritten notes on the margins, but above all in the back of the partners’ minds. C  A

WORLD

A6

Remittances up 3.4% in January C

A RADICAL ECON THEORY GAINING CONVERTS

CLIMATE REALITY PROJECT Former US Vice President

WORLD

A7

Al Gore addresses on Monday participants during a threeday climate-change training and workshop in Pasay City. Gore, who won the Nobel Peace Prize in 2007, has chosen the Philippines as the venue for his Climate Reality Project workshop, which hopes to offer solutions to the global concerns on climate change. AP/BULLIT MARQUEZ

PHL to see most offices in 26 years There’s a substantial increase in nonvoice or IT and other services that require bigger workspace.” —Megaworld’s Go

P

HILIPPINE builders are adding the most office space in Metro Manila in at least 26 years, catering to companies, such as American Express Co. and International Business Machines Corp., that are outsourcing more jobs to the Southeast Asian nation. About 710,000 square meters (7.6 million square feet) of office space will be built in the Philippine capital this year and more than 780,000 square meters in 2017, broker Colliers International estimates. Each

PESO EXCHANGE RATES n US 46.5060

is a record for workspace built in a year, and combined represents a fifth of the stock at the end of 2015, according to the broker’s data stretching back to 1990. “Demand for office space from the outsourcing sector is still very high, and we are answering this demand,” said Josefino Lucas, deputy chief operating officer of Eton Properties Philippines Inc., the real-estate unit of billionaire Lucio Tan’s LT Group Inc. The flood of new office space is designed to meet demand from inter-

national corporates looking to place jobs, such as auditing and information technology (IT), in countries with cheaper labor costs where call centers have traditionally driven the outsourcing boom.

Rents pressured

THE new supply will cap rents and push vacancies higher, according to Colliers. Office rents won’t increase in Metro Manila’s four biggest business districts tracked by Colliers S “PHL,” A

ASH sent home by migrant Filipino workers continued to grow in January, albeit at a slower pace compared to the Christmas holiday surge the previous month. The Bangko Sentral ng Pilipinas (BSP) said on Tuesday the country’s remittances grew by 3.4 percent in January, valued at $2.022 billion. Growth for the period proved slower compared to both the previous month’s performance and growth in the same period last year. In particular, the 3.4-percent cash-remittance growth in January was slower than the 4.9-percent expansion posted the previous December, when most overseas Filipino workers (OFWs) remitted even more money home to finance holiday expenses. The remittances a year earlier also expanded by 4.9 percent. In a separate commentary, ING Bank economist for Asia Tim Condon said remittances typically retrace part of their December surge in January. He also said an earlier peso weakness encouraged OFWs to delay sending money home. The BSP, meanwhile, said remittance flows from overseas Filipinos remained resilient, its continued strength underpinned by sustained demand for skilled Filipino manpower overseas. Broken down by OFW source, remittance from land-based Filipino workers continued to make up for most of the inflows for the month accounting for $1.6 billion. Sea-based workers, meanwhile, contributed $447 million of the total remittances coursed through banks in January 2016. S “R,” A

n JAPAN 0.4087 n UK 66.5268 n HK 5.9943 n CHINA 7.1531 n SINGAPORE 33.7931 n AUSTRALIA 34.9028 n EU 51.6403 n SAUDI ARABIA 12.4049

Source: BSP (15 March 2016 )

BMReports BusinessMirror

A2 Wednesday, March 16, 2016

news@businessmirror.com.ph

Cebu Pacific seen tripling PHL-Guam traffic

T

B L S. M

UMON, Guam—Budget carrier Cebu Pacific will soon add more capacity to the PhilippinesGuam route to capitalize on the large Filipino community in the American territory, help bring down fares and triple the route’s traffic.

Cebu Pacific Long Haul Division General Manager Alex B. Reyes said his company will help stimulate traffic between the two countries with the launch of its

PHL. . .

C  A

this year, compared with an average rise of about 5 percent in 2015, the broker said. The vacancy rate is seen rising to 5.6 percent in 2016, compared with 3.4 percent last year, it said. “While demand is seen to keep growing, the unprecedented level of new supply will exceed forecast demand, and it may take time to absorb that supply,” Julius Guevara, research director at Colliers in Manila, said. Metro Manila was the No. 2 city for business-process outsourcing (BPO), last year, behind Bangalore in India, according to New York-based Tholons Capital’s list of top outsourcing destinations. The IT & Business Process Association Philippines, or Ibpap, estimates 2016 revenue at $25 billion,

four weekly flights to Guam from Manila. Volume will likely double or even triple in the short haul. “Normally, when we come in, the fares that we charge are half of what

1,440

Hike in Manila-Guam seats with the entry of Cebu Pacific is available out there. So when we are able to drop the price, the stimulation factor is very, very strong. The traffic doubles in a short span of time because it’s so much more affordable,” he said. Reyes noted that his group w i l l not eat on t he e x ist ing market share of incumbent airlines, but will complement them in increasing traffic between the

up from about $21.2 billion last year. Rents in Makati’s central business district average $230 per square meter a year, higher than the $134 per sq m in Bangalore and cheaper than $501 per sq m in Mumbai, according to broker Jones Lang LaSalle Inc.

Nonvoice services

AN increasing number of companies are outsourcing technical and consulting jobs, like helping banks manage financial derivatives and improving companies’ supply chains, according to the Ibpap, which forecasts the number of BPO workers to rise to 1.3 million this year from about 1 million in 2014. “We’re going up the value chain,” Jericho Go, first vice president at Megaworld Corp., said. “There’s a substantial increase in nonvoice or IT and other services that require bigger workspace.” Of about 80 percent of office space

two countries. “It’s not really taking existing market share from the carriers currently servicing the route, but we end up doubling, or tripling the traffic,” he said. Recent data show that the Manila-Guam route is relatively underser ved, compared to other destinations with smaller Filipino populations. There are about 5,900 weekly seats between Manila and Guam before the service of the budget carrier was launched on Tuesday. With the said introduction of the new service, this figure rose by as much as 1,440 seats per week. “As planes fill up, we would look to add additional frequencies—the

taken up by outsourcing tenants of Megaworld, the Philippines’s largest office landlord, at least 30 percent is occupied by call centers, according to the company. Voice-related services accounted for 60 percent of office space a decade ago. American Express this month opened its first Philippine outsourcing center for credit and fraud services, joining companies like JPMorgan Chase & Co. and IBM, which have placed jobs other than answering phone calls in the country. About half of Megaworld’s 200,000 sq m of workspace planned for the next two years is reserved, Go said. The demand prompted the company to increase its recurring revenue target by P1 billion to P11 billion for 2016, he said. LT Group’s property unit is adding at least 200,000 sq m of office space for the next five years, said Eton Properties’s Lucas. Bloomberg News

same path as what we have done in other international destinations,” Reyes noted. About three out of 10 people in Guam are Filipino. Cebu Pacific offers flights to a network of over 90 routes on 64 destinations, spanning Asia, Australia and the Middle East. It is slated to launch direct flights between Manila and Guam, its first US destination, on March 15. The airline’s 57-strong fleet is comprised of eight Airbus A319, 35 Airbus A320, six Airbus A330 and eight ATR 72-500 aircraft. Between 2016 and 2021, the airline expects delivery of three more brand-new Airbus A320, 30 Airbus A321neo and 16 ATR 72-600 aircraft.

Remittances. . .

C  A

By country source, more than three-fourths of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, Canada, Singapore, the United Kingdom, Hong Kong, Qatar and Japan. “The continued efforts of bank and nonbank remittance service providers to expand their international and domestic market coverage through their network of remittance business partners worldwide also provided support to steady remittance flows,” the BSP said. The Department of Finance’s view on remittances, meanwhile, is that despite its continued strength amid the volatility in the global market, the government must still be prepared for any eventuality resulting from low oil prices. “Despite record-low oil prices, Middle East continues to be a strong source of remittances, however, the government should be prepared with options when the effect of the oilprice crises starts to seep in,” Finance Undersecretary Gil Beltran said. “The recent Asean integration may be a key to stronger remittance flows from Asia in the near future,” he added. Bianca Cuaresma

Perks. . .

C  A

domestic prodution to a required level—after the deadline for the submission of documents ended on Tuesday. Mitsubishi Motors Corp. (MMC), MMPC’s mother company, reiterated that if its application is approved, it would expand its local production in the Philippines by assembling the Mirage and Mirage G4 in its plant in the country beginning 2017. To do this, MMC will have to invest another P4.3 billion in its Philippine unit initially, which will go to its new stamping plant. The amount will go to pressed metal parts production, a requirement in the DTI’s CARS Program to hike local-content sourcing. MMC CEO Osamu Masuko earlier said the expansion of the plant capacity would add 700 new jobs to MMPC’s existing work force of 970 workers. This will be on top of the 1,000 workers to be hired by tier 1 part suppliers, and 3,000 to 4,000 personnel in tiers 2 and 3. From its production level of 18,000 units last year of the Adventure and the L300, MMPC will be shifting to higher gear starting 2017, increasing the number to 25,000 to 30,000 units per year. Masuko said this will be doubled to 50,000 units and eventually to 100,000 units—the minimum hurdle set by the CARS Program to enjoy the production-volume incentive. To complement the increase in production volume, Mitsubishi will also be beefing up its sales team, intending to increase its current dealership network of 47 branches to 54 by next year. The TMPC, meanwhile, only said it has enrolled the production of the Vios sedan model to the CARS scheme.

BMReports BusinessMirror

news@businessmirror.com.ph

Wednesday, March 16, 2016 A3

SC junks petition to stop K to 12 implementation

I

B J R. S J

T was a busy day for the Supreme Court (SC) on Tuesday, as it denied the petition for the suspension of the implementation of the K to 12 school curriculum; affirmed the indictment of lawyer Jessica “Gigi” Reyes and Janet Lim-Napoles for plunder; and granted detained former President Gloria Macapagal-Arroyo a furlough on her 69th birth anniversary.

The Court denied the plea of several groups and individuals seeking the issuance of a temporary restraining order (TRO) to immediately stop the implementation of the controversial K to 12 Program of the Department of Education, which added two years in the country’s secondary education. At a press briefing, SC Spokesman

Theodore Te said the justices decided not to issue a TRO, or a writ of preliminary injunction, or both, against the K to 12 Program during their regular en banc session. Among those who sought a relief from the K to 12 Program were Sen. Antonio Trillanes, et al.; University of the Philippines Prof. Eduardo Alicias, et al.; Party-list Rep.

Antonio Tinio of ACT, et al.; Maria Dolores Brillantes, et al.; Richard Troy Colmenares, et al.; and Council for Teachers and Staff of Colleges and Universities of the Philippines, et al. In seeking the issuance of a TRO or a writ of injunction or both against the flagship program of the Aquino administration, the petitioners argued that K to 12 should be stopped until other pressing problems, such as lack of classrooms and other facilities and textbooks, as well as the low salary of teachers, are addressed. They suggested that the K to 12 Program should be suspended until an adequate and comprehensive study on the impact and effects of the implementation of the program, particularly on the already impoverished sectors of the society—the parents, the teachers and the youth—is undertaken.

Reyes, Napoles indictment

THE Court, at the same time, unanimously affirmed the indictment for plunder by the Ombudsman against lawyer Jessica Lucila “Gigi” Reyes, the former chief of staff of Sen. Juan

Ponce Enrile, and Janet Lim-Napoles in connection with the multibillion pesos Priority Development Assistance Fund, or pork-barrel scam. Also affirmed was the indictment of Napoles’s driver, John Raymund de Asis, for plunder and the graft charges filed by the Ombudsman against her children— Jo Christine and James Christopher—also in relation to the scam. Also denied by the SC during its regular en banc session was the plea of Reyes to nullify the issuance of the arrest warrant issued by the Sandiganbayan against her. “Wherefore, the petitions are dismissed for lack of merit. Accordingly, the assailed resolutions and orders of the Office of the Ombudsman and the Sandiganbayan are hereby affirmed,” the Court said. In her petition, Reyes said the Court should nullify her indictment for plunder on the ground of violation of her right to due process. She noted that the Ombudsman failed to provide her with copies of affidavits, transcripts of hearings and statements provided by state

witness Ruby Tuason, which she needed in order to rebut the latter’s allegations. Reyes pointed out that the Ombudsman committed grave abuse of discretion in indicting her for plunder based on the sworn statements of Tuason, which she was never furnished with during the preliminary investigation of the case despite her repeated requests. She further accused Ombudsman Conchita Carpio-Morales of engaging in an “unfair and unequal enforcement of the law” when she granted Tuason and the other alleged whistle-blowers immunity from prosecution, which violated her right to equal protection of the law. Napoles, on the other hand, said she could not be validly charged with plunder, as she was not a public officer. For his defense, de Asis said the Ombdusman committed grave abuse of discretion when its ordered its indictment for plunder. He argued that he was charged for plunder merely.

Furlough for GMA

THE SC, meanwhile, granted the plea of former President Gloria Macapagal-Arroyo for a furlough, so she can celebrate her 69th birth anniversary with her family and relatives. But instead of the five days that Arroyo sought, the Court gave her only three days “to be spent exclusively” at her residence in La Vista Subdivision in Quezon City. Arroyo’s furlough will last from 8 a.m. of April 4 until 5 p.m. of April 6. The former President is currently under hospital arrest at the Veterans Memorial Medical Center. Arroyo’s camp said being with her family on her birthday would do the former President “some good” amid her health problems. It will be recalled that the SC earlier ordered the antigraft court Sandiganbayan to justify its decision denying Arroyo’s plea to post bail in connection with the plunder case filed against her for alleged misuse of P366 million in intelligence funds of the Philippine Charity Sweepstakes Office from 2008 to 2010.

Farewell, Amba

You will always be in our prayers and cherished in our memories

PHOTOS BY ALYSA SALEN & STEPHANIE TUMAMPOS

news@businessmirror.com.ph

AseanWednesday BusinessMirror

Editor: Max V. de Leon • Wednesday, March 16, 2016 A5

Suu Kyi loyalist and friend elected president Malaysia seeks new rules to bar foreign political funds

$242

Limit of anonymous donations in the proposed framework to regulate political funding in Malaysia

M

ALAYSIA is reviewing plans to bar foreign political donations after Prime Minister Najib Razak became embroiled in a scandal over a $681-million contribution that ended up in his personal bank account. A Malaysian committee working on a framework to regulate political funding also determined that anonymous donations should not exceed 1,000 ringgit ($242) and contributions must be held in a bank account that could be audited, said Paul Low, a minister in the Prime Minister’s Department. “Political donations from foreign interest and sources should be prohibited,” Low, who chairs the National Consultative Committee on Political Funding, said in a statement. “This is necessary as a safeguard against foreign influence on local politics, as well as the sovereignty of the nation.” Najib is facing his biggest political crisis since coming to power seven years ago as questions linger over the donation before the 2013 election that the government said came from the Saudi royal family. Attorney General Mohamed Apandi Ali in January cleared Najib of wrongdoing over the “personal contribution” and said the premier had returned $620 million that was not utilized. Najib has consistently denied any wrongdoing and has never explained what happened to the remaining $61 million. The Malaysian Bar association said on Tuesday it was seeking a judicial review of the attorney general’s decision not to pursue a criminal case against Najib. Under the constitution, a decision to start criminal prosecution lies solely with the attorney general. Najib announced the formation of the committee in August, more than a month after news broke that the $681 million had passed through his personal accounts. The premier, 62, has denied taking money for personal gain and said the funds were earmarked to meet the party and community’s needs. Accepting such funds isn’t a new practice and the furor was part of a campaign to force him from office, he said. The prime minister said last year that the country needed to urgently regulate political financing to ensure accountability as Malaysia had no laws to determine wrongdoing over donations even though there are some rules in place on election expenditure. Bloomberg News

HTIN KYAW (left), newly elected president of Myanmar, walks with National League for Democracy leader Aung San Suu Kyi. AP

M

YANMAR’S parliament elected Htin Kyaw as the country’s new president on Tuesday in a watershed moment that ushers the longtime opposition party of Aung San Suu Kyi into government after 54 years of direct or indirect military rule.

Htin Kyaw

The joint session of the two houses of parliament broke into thundering applause as the speaker Mann Win Khaing Than announced the result: “I hereby announce the president of Myanmar is Htin Kyaw, as he won the majority of votes.” Immediately, the state-run Myanmar TV’s camera zoomed in from above on a beaming Suu Kyi, sitting in the

and harassment by military rulers without ever giving up on her nonviolent campaign to unseat them. But a constitutional provision barred Suu Kyi from becoming president, and she made it clear that whoever sits in that chair will be her proxy. Still, Htin Kyaw will be remembered by history as the first civilian president for Myanmar and the

front row, clapping excitedly, for a live nationwide audience. The 70-year-old Htin Kyaw, a longtime confidant of Suu Kyi, will take office on April 1, but questions remain about his position and power. Rightfully, the job belonged to Suu Kyi, who has been the face of the pro-democracy movement and who endured decades of house arrest

Myanmar’s first civilian president and head of its first government to be elected in free and fair polls

head of its first government to be elected in free and fair polls. After the parliament session ended, Suu Kyi did not comment as she exited, leaving the new president to deliver the first reaction. “This is a victory for the people of this country,” Htin Kyaw said in a brief comment to reporters. He secured 360 votes from among 652 ballots cast in the bicameral parliament, where the vote count was read aloud and announced by a parliament official. The military’s nominee, Myint Swe, won 213 votes and will become the first vice president. Htin Kyaw’s running mate from the National League for Democracy (NLD) party, Henry Van Tio, won 79 votes and will take the post of second vice president. “We are very satisfied with the result of the presidential election,” said Tun Win, a legislator from the

Arakan National Party. “He really should be the leader. I hope he can lead this country to peace and stability, equality and implement the rule of law in this country.” The NLD, and indeed Suu Kyi, came into prominence in 1988 when popular protests started against the military that had ruled in different incarnations since taking power in a 1962 coup. After crushing antigovernment riots in which thousands of people were killed, the junta placed Suu Kyi under house arrest in 1989. It called elections in 1990, which the NLD swept. But the military ignored the results and stayed in power. Suu Kyi was awarded the Nobel Peace Prize a year later, and it was around this time that Htin Kyaw—then a computer programmer-turned-bureaucrat—became involved in party work. His father-in-law was already a prominent NLD leader and his wife a member. Htin Kyaw, who had known Suu Kyi since grade school, became her confidant and adviser on foreign relations. As Myanmar lurched from one political crisis to another, Suu Kyi was released and rearrested several times. The junta finally started loosening its grip on power in 2010, allowing elections that were won by a military-allied party after the NLD boycotted the polls as unfair. After more reforms, another general election was held on Nov. 8 that was swept by the NLD, a reflection of Suu Kyi’s widespread public support. The constitutional clause that denied her the presidency excludes anyone from the job who has a foreign spouse or children. Suu Kyi’s two sons are British, as was her late husband. The clause is widely seen as having been written by the military with Suu Kyi in mind. The military reserved for itself 25 percent of the seats in parliament, ensuring no government, current or future, can amend the constitution without its approval. Myint Swe is seen as a close ally of former junta leader Than Shwe and remains on a US State Department blacklist that bars American companies from doing business with several tycoons and senior military figures connected with the former junta. AP

Vietnam stocks seen reaching 2008 high on economy, earnings

W

ITH Vietnamese shares close to erasing their losses this year, strategists say the benchmark gauge will continue climbing to reach the highest level since 2008, as a rising economy and earnings draw investors. After surging 11 percent from this year’s low on January 21, the measure will extend gains to about 642 by the end of 2016, or 11 percent above its close on March 14, according to the average of 10 analyst forecasts in a Bloomberg survey. The stock index rose 6.1 percent in 2015, the best performer in Southeast Asia, while the MSCI ALL Country World Index slid 4.3 percent. “The outlook for this year looks better as we expect strong earnings growth, driven by an emerging consumer and strong manufacturing,” said Barry Weisblatt, head of research at Viet Capital Securities, the country’s third-largest brokerage. “The domestic story is quite

6.1%

Rise of Vietnam’s stock index in 2015, the best in Southeast Asia

strong.” He expects earnings growth of 20 percent this year and targets the stock index to reach 680 by year-end. Vietnam’s economic growth target of almost 7 percent this year makes it among the fastestgrowing markets in the world and offers investors a refuge in a region rocked by the fallout from China’s economic slowdown. Companies in the consumer, industrial, building and power sectors will help power

a rally as they benefit from fastest expansion in almost a decade, according to the strategists. Profit at companies on the benchmark gauge are projected to grow 14 percent in the next 12 months. Dream House Investment Corp., a construction company, and Foreign Trade Development and Investment JSC, a developer of industrial parks, are among the biggest gainers this year on the VN Index, having jumped at least 46 percent. The VN Index is down 0.2 percent for 2016 after briefly erasing its annual loss in intraday trading on March 14. The measure was down as much as 10 percent in January. The stock gauge rose for a fourth year in 2015, the longest run of annual gains since 2007. Overseas investors added a net $100.4 million to their Vietnam stock holdings in 2015, the 10th straight year of inflows, when other Asian markets suffered outflows. Disbursed foreign investment

surged to a record $14.5 billion last year, while pledged foreign investment climbed 12.5 percent, government data show. The benchmark gauge swung between gains and losses as of 10:47 a.m. local time on Tuesday. “Strong domestic consumption and continued FDI will support the market,” Patrick Mitchell, director of institutional marketing at Maybank Kim Eng Securities Ltd., said in Ho Chi Minh City. “The positive macroeconomic environment continues to promote cash flows from developed markets into Vietnam.” He recommends builders, as well as companies that will gain from freetrade agreements, such as Kinh Bac City Development Share Holding Corp., Gemadept Corp. and Cotec Construction JSC.

Growth quickens

VIETNAM’S GDP rose 7.01 percent in the fourth quarter from a year earlier,

quickening from a revised 6.87-percent gain in the three months through September, according to government data. The Asian Development Bank predicts the country’s economic expansion for 2016 will be 6.6 percent, the highest among six Southeast Asian countries, according to a December report. The Vietnamese equity gauge is trading at 1.7 times net assets, near the lowest level in three years, while the MSCI All Country World Index is valued at 1.9 times, data compiled by Bloomberg show. Vietnamese equities are still vulnerable to external risks, including prospects of higher US interest rates and more devaluations of China’s yuan that may affect the local market, according Nguyen Hoang Giang, chief executive officer at VNDirect Securities JSC. The yuan’s depreciation will “put pressure” on the local currency to compete for export markets, he said. Bloomberg News

The W

Business

A6 Wednesday, March 16, 2016 * Editor: Lyn Resurreccion

Former finance minister named as Taiwan premier

T

PEOPLE walk through a flooded street in Greenville, Missouri, on March 10. The National Weather Service says 3 inches to 10 inches of rain has fallen in counties along the Mississippi River in western Tennessee, eastern Arkansas and northern Mississippi since late Tuesday, flooding roads, parking lots and fields. BILL JOHNSON/THE DELTA DEMOCRAT-TIMES VIA AP

BECAUSE OF RISING SEA LEVELS

13.1 million US coastal residents face flooding

A

S many as 13.1 million people living along US coastlines could face flooding by the end of the century because of rising sea levels, according to a new study that warns that large numbers of Americans could be forced to relocate to higher ground.

T he est i m ated nu mber of coastal dwellers affected by rising sea level is three times higher than previously projected, according to the study published on Monday in the science journal Nature Climate Change. If protective measures are not implemented, the study says, large numbers of Americans could be forced to relocate in a migration, mirroring the scale of the Great Migration of African-Americans from Southern states during the 20th century. “We’ve been underestimating what those potential impacts could be,” said Mathew Hauer, one of the coauthors of the study. He is an applied demographer at the University of Georgia, Athens, and a doctoral candidate in the school’s geography department. Rising sea levels, widely believed to be the result of climate change, are threatening to wipe out some

70.9"

Possible rise in sea level when those at risk of flooding would reach 13.1 million people. of the world’s island nations, such as the Maldives in South Asia, that scientists say could vanish under water this century. The traditional approach to assessing the effects of rising sea levels is to look at the current population and infrastructure, Hauer said. His study accounts for ongoing population growth. “Coa st a l com mu n it ies a re among some of the most rapidly growing in the United States, so

we have to think about the anticipated expansion of those populations that is likely to occur in this century,” Hauer said. Hauer and his colleagues combined environmental data, such as elevations and flood risks for specific locations, with smallscale population projections for US coastal states and projected sea level rise from the National Oceanic and Atmospheric Administration (NOAA). Their findings revealed that if the sea level rose 35.4 inches by the year 2100, some 4.2 million people in US coastal regions would be at risk of flooding. But if the sea level were to rise by 70.9 inches, which lies at the higher end of projections by NOAA, then the number of those at risk of flooding would reach 13.1 million. The Southeastern United States accounts for 70 percent of the potential populations that could be affected, according to the study. Florida accounts for almost half, Hauer said. States, such as Georgia, South Carolina and Louisiana, have more than 10 percent of coastal populations at risk under the 70.9-inch scenario, according to the study. California does not fare too well, either. Upward of 1 million people could be affected by sea-level rise, Hauer said. Orange County, for example, is projected to see 225,720 residents potentially affected under the 70.9 inch

sea level rise scenario, and ranks eighth on a list of 319 coastal counties whose populations are at risk. San Mateo County ranks seventh with a potential 249,020 residents at risk. In September 2014 Democratic Gov. Jerry Brown signed a measure designed to help California prepare for rising sea levels after a report by the California State Assembly’s Select Committee on Sea Level Rise and the California Economy found that the state was “woefully unprepared” for potential changes caused by sea-level rise. The legislation created a statewide online database that allows California communities to have access to studies, modeling, inundation maps and other information about rising sea-levels. Scientists say that implementing protective measures, such as raising homes and roadways, building wetlands as buffers against rising tides and constructing levees and sea walls, is key to preparing for sea-level rise. Forecasting the potential number of people who might be forced to move because of sea level rise, as outlined in the new study, underscores the urgency to take action. “These numbers could be useful for policy-makers to make decisions about growth management strategies, or protective infrastructure,” Hauer said. Los Angeles Times/TNS

Fossil explains how ‘T. rex’ became king of the dinosaurs

F

OR the last 20 million years of the Age of Dinosaurs, giant tyrannosaurs sat high on the top of the global food chain because of their enormous size and sharp senses. But it wasn’t always that way. The giant carnivores that ruled the planet from 85 million to 65 million years ago evolved from an ancestral lineage of tyrannosaurids that were much smaller—about the size of a horse, paleontologists say. These smaller tyrannosaurids also lacked the distinctive brains and specialized ears attuned to low frequency sounds that helped their more modern relatives hunt so effectively.

The earliest tyrannosaurids begin to show up in the fossil record about 170 million years ago, or almost 100 million years before Tyrannosaurus rex first walked the Earth. Paleontologists say T. rex’s ascent to the colossal giants of the late Cretaceous was one of the seminal events in dinosaur evolution. But exactly how this change developed has long been a mystery. That’s because the fossil record of tyrannosaurids has had a frustrating gap that lasted for about 20 million years between roughly 100 million and 80 million years ago. But now, at last, some clues to the how the kings of the dinosaurs evolved have started to emerge.

A paper published on Monday in Proceedings of the National Academy of Sciences describes the recently discovered Timurlengia euotica, a species of tyrannosaurid that lived about 90 million years ago, helping to fill in “a major gap in the evolutionary history of tyrannosaurids,” researchers wrote. The newly described dinosaur was discovered in Kyzylkum Desert in Uzbekistan. It was also the size of a horse, but the authors say it had an inner ear similar to that of later tyrannosaurids, as well as a brain that was similar in structure, although smaller than that of T. rex. This suggests that this dinosaur

lineage developed its keen hunting senses first, and its giant size later. “Although it is currently only a single data point, Timurlengia indicates that tyrannosaurids remained small- to medium-size well into the Middle Cretaceous,” the authors wrote. Although the find is helpful, the authors said they still hope to learn more about this murky interval in dinosaur history. “Future discoveries from this gap will undoubtedly lead to a better understanding of how tyrannosaurids rose from marginal creatures to some of the largest terrestrial predators on Earth,” they wrote. Los Angeles Times/TNS

AIPEI, Taiwan—President-elect Tsai Ing-wen on Tuesday named a former finance minister as Taiwan’s next premier, tasked with reinvigorating the island’s slowing high-tech economy and stabilizing relations with neighbor China, which claims Taiwan as its own territory. Introduced by Tsai at a news conference on Tuesday, Lin Chuan said his would not be just an “economics and finance Cabinet,” since challenges come from all sides. Lin and Tsai will take office on May 20. China has responded skeptically to Tsai’s January landslide election that also saw her independence-leaning Democratic Progressive Party gain a decisive parliamentary majority. Tsai has pledged no change to the status quo of tense-but-stable peace and robust economic exchanges between the sides. However, China says it isn’t satisfied with that stance and insists she endorse Beijing’s claim that the two are part of a single Chinese nation. Chinese President Xi Jinping said earlier this month that China won’t budge on that demand, regardless of political changes on the island of 23 million. China would “resolutely contain Taiwan independence-secessionist activities in

any form,” Xi told delegates to China’s ceremonial legislature on March 5. Tsai takes over from China-friendly Nationalist Party President Ma Yingjeou, who oversaw the signing of a series of agreements during his eight years in power, establishing closer economic ties between the sides. Her election was seen as a rejection of closer economic ties between the sides that many younger Taiwanese see as threatening their economic futures. A Japanese colony for 50 years, Taiwan was reabsorbed by China in 1945. It then split away again after Chiang Kai-shek’s defeated Nationalists moved their government to the island in 1949, after the Communist seizure of power on the mainland. Apart from occasional criticism in state media, China has largely held its fire over Tsai’s election. Wearing a black turtleneck and dark jacket, Lin promised to respond to all questions from the island’s freewheeling media, in keeping with the accessible and downto-earth image of Taiwanese politicians that contrasts starkly with the secrecy and aloofness of China’s communist leadership. However, Lin asked for some degree of privacy, saying: “If you all call me at home, I’ll never get any sleep.” AP

Delegates count for Clinton, Sanders to win nomination

W

A SHINGTON—Hi l lary Clinton can’t win enough delegates to wrap up the Democratic nomination in Tuesday’s elections, but she can nonetheless, take a big step forward. Owing to her big primary wins in the South, Clinton has 214 more pledged delegates than rival Bernie Sanders. Her lead is even larger when superdelegates—party insiders who can support any candidate they wish—are included in the tally. With them, Sanders has just 580 delegates to Clinton’s 1,235, or more than half the number needed to win her party’s nomination at the party’s national convention in July. With 691 delegates at stake, Tuesday’s contests offer Clinton an opportunity to net a big chunk of delegates, putting her on an unobstructed path to the nomination. Voters head to the polls in Florida, Illinois, Missouri, North Carolina and Ohio, and by night’s end, she stands to be at least two-thirds of the way toward reaching the general election. But barring a sweep or close to it, it’s still likely to be a long spring for Clinton. That’s due to some tedious delegate math and a slowing primary calendar after Tuesday. Democrats award delegates in proportion to the share of the vote, so even the loser gets some. Here’s a look at how various outcomes in Tuesday’s races could shape the race for the Democratic nomination:

Sanders takes 3 of 5

UNDER Sanders’s self-described best scenario, he wins Missouri, Illinois and Ohio, while losing to Clinton in Florida and North Carolina by bigger margins. If so, she’ll still come out ahead in delegates on the night, ending it at roughly 1,600 delegates. Still, Clinton will be as many as 800 delegates short of reaching the 2,383 needed to win the nomination, underscoring her long road ahead. Just over 1,000 delegates will be at stake from late March through the end of April, a pot that won’t be big enough for Clinton to wrap things up if she keeps splitting contests with Sanders. For his part, Sanders would claim fresh momentum, having won nearly half the states that voted to date—12 to Clinton’s 14. He’s also heading into a batch of upcoming caucus states, which are friendly to him. But net gains will be hard to come by. Sanders needs

to start posting big blowout wins to catch up to Clinton.

A sweep or something like it for clinton

IF Clinton were to win four or five states on Tuesday, she will net several dozen more delegates, adding to her 200-plus pledged delegate lead earned in the primaries and caucuses to date. The most likely outcome in such a scenario: big delegate gains in Florida and North Carolina, and narrower wins and delegate hauls in Illinois, Ohio and Missouri. She would still need 700 or so delegates to clinch—narrow wins don’t net many delegates. But Clinton will have reclaimed momentum, having won as many as 17 states to Sanders’s nine. And in that case, even with his strong fund-raising, it will be increasingly hard for Sanders to make the case he can be the nominee. Clinton would need to win roughly 35 percent of the remaining delegates and uncommitted superdelegates through June, compared to 65 percent for Sanders. Up to this point, she’s been winning about 68 percent.

The superdelegates

CLINTON has superdelegates to thank for her substantial delegate lead. If the nomination were decided based on just primaries and caucuses, Clinton would still need to gain 46 percent of the remaining delegates to earn an outright majority of pledged delegates. Sanders would need to win 54 percent. That’s an uphill battle for Sanders, but it’s almost insurmountable when including superdelegates. Those party officials, governors and members of Congress make up nearly one-third of the 2,383 delegates needed to win. When including superdelegates, Sanders currently needs to win 61 percent of the remaining delegates and uncommitted superdelegates heading into Tuesday’s contests to clinch the nomination; up to now, he’s only been winning 32 percent. That low percentage is due to his particularly poor performance among superdelegates: he has 26 endorsements to Clinton’s 467, or just 5 percent of those who have expressed support for a candidate.

The AP delegate count:

 Based on primaries and caucuses alone: Clinton leads, 768 to Sanders’s 554.  Including superdelegates: 1,235 to Sanders’s 580. AP

World

sMirror

news@businessmirror.com.ph | Wednesday, March 16, 2016

A7

A radical economic theory gaining converts

I

N an American election season that’s turned into a bonfire of the orthodoxies, one taboo survives pretty much intact: Budget deficits are dangerous. A school of dissident economists wants to toss that one onto the flames, too. It’s a propitious time to make the case, and not just in the US. Whether it’s negative interest rates, or helicopter money that delivers freshly minted cash direct to consumers, central banks are peering into their toolboxes to see what’s left. Despite all their innovations, economic recovery remains below par across the industrial world. Calls for governments to take over the relief effort are growing louder. Plenty of economists have joined in, and so have top money managers. Bridgewater’s Ray Dalio, head of the world ’s biggest hedge fund, and Janus Capital ’s Bill Gross, say policymakers are cornered and will have to resort to bigger deficits. “There’s an acknowledgment, even in the investor community, that monetar y policy is kind of running out of ammo,” said Thomas Costerg, economist at Standard Chartered Bank in New York. “The focus is now shifting to fiscal policy.”

Currency monopoly

THAT ’S where it should have been a l l a long , accord ing to Modern Money Theory (MMT). The 20-something-year-old doctrine, on the fringes of economic thought, is getting a hearing with an unconventional take on government spending in nations with their own currency. Such countries, the MMTers argue, face no risk of fiscal crisis. They may owe debts in, say, dollars or yen—but they’re also the monopoly creators of dollars or yen, so can always meet their obligations. For the same reason, they don’t need to finance spending by collecting taxes, or even selling bonds. The long-run implication of that approach has many economists worried. “I have no problem with deficit spending,” said Aneta Markowska, chief US economist at Societe Generale in New York. “But this idea of the government printing money—unlimited amounts of money—and running unlimited, infinite deficits, that could become unhinged pretty quickly.” To which MMT replies: No one’s saying there are no limits. R ea l resou rces c a n be a const ra int—how muc h l abor is available to build that road? Taxes are an essential tool, to ensure demand for the currency

20 yrs old Modern Money Theory and cool the economy if it overheats. But the MMTers argue there’s plenty of room to spend without triggering inf lation. The US did dramatically loosen the purse strings after the 2008 crisis, posting a deficit of more than 10 percent of GDP the next year. That’s since been trimmed to 2.6 percent of GDP, or $439 billion, last year. The Congressional Budget Office expects the gap to widen in the coming decade, as retiring babyboomers saddle the government with higher social security and health-care costs. That’s the risk often cited by fiscal hawks. Mainstream doves accept the long-term caveat. But they point to record-low bond yields and say investors aren’t worried about deficits right now, so why not spend? MMT takes that argument even further. The question is: Who’s listening? “They’re shutout of the central banks, the finance ministries, the Treasuries of the world,” said Joe Gagnon, a senior fellow at the Peterson Institute for International Economics in Washington and former Federal Reserve Board economist. Gagnon doesn’t subscribe to all MMT arguments, but thinks there’s enough slack in the global economy that “it’d be a good time for them to have influence.”

‘Few toes’

IF MMT seems marginal now, Randy Wray, an economics professor at the University of Missouri-Kansas City and one of the doctrine’s founders, recalls a time when it barely registered at all. Wray, who wrote Understanding Modern Money in 1998, says he used to meet with like-minded colleagues and count how many people understood the theory. “After 10 years, we had to go a little beyond two hands—we had to use a few toes,” he said. Now, thanks to the blogosphere, he says there are thousands around the world, especially in struggling euro-area countries, like Italy and Spain. MMT

DEMOCRATIC presidential candidate Sen. Bernie Sanders of Vermont speaks at a campaign rally at The Family Arena on March 14 in Saint Charles, Missouri. AP/JEFF ROBERSON

was among the early doomsayers on the single currency, arguing the lack of monetary sovereignty would render governments helpless in a crisis. In the US one presidential candidate is at least listening to MMT economists. Advisers to Bernie Sanders include some of the school’s leading advocates: Stephanie Kelton, a Sanders hire to the Senate Budget Committee, and James K. Galbraith, whose father helped shape President Lyndon Johnson’s “Great Society” programs.

Hard sell

THE match makes sense. Sanders is promising massive investments in health, education and infrastructure. Economists who see more danger in fiscal austerity than looseness make natural allies. Ask the campaign, though, and they’re quick to point out that the Vermont senator is a “deficit hawk,” whose spending plans are matched dollar-for-dollar by tax increases. “He’s not interested in theory,” said Warren Gunnels, Sanders’s policy director. “He’s interested in making sure that we rebuild the middle class, increase wages and make sure that we no longer have one of the highest poverty rates of any developed country.” So even a left-leaning candidate with MMT economists on staff shies away from endorsing the

doctrine—an indicator of what a hard sell it is.

Tighten belts?

THOSE who push back sometimes argue that money-printing puts countries on a path that eventually leads, in a worst-case scenario, to Zimbabwe—where money-printing debased the currency so badly that all the zeros could barely fit on banknotes. Or Venezuela, whose spending spree helped push inflation to 180 percent last year. Japan’s a more mixed picture: years of deficits haven’t scared off borrowers or unleashed inflation, but haven’t produced much growth, either. There’s also a peculiarly American enthusiasm for balanced budgets, according to Jim Savage, a political science professor at the University of Virginia. He’s traced it to the earliest days of the US, rooted in a “long-standing fear of centralized political power, going back to England.” Wray says there are episodes in American history when a different understanding prevailed. During World War II, he says, US authorities learned a lesson that’s since been forgotten—that “we’ve always got unemployed resources, including labor, and so we can put them to work.” Savage says Americans have historically tended to conflate household and govern-

ment debts. That category error is alive and well. “Small businesses and families are tightening their belts,” President Barack Obama said in 2010 as he announced a pay freeze for government workers. “Their government should, too.” It’s not just MMT economists who winced at the comment. Many more agree that it’s precisely when households are cutting back that governments should do the opposite, to prevent a slump in demand. That argument doesn’t carry much sway in Congress, though. That’s one reason the Federal Reserve has had to shoulder so much of the burden of keeping the recovery alive, Societe Generale’s Markowska says. “When it comes to deciding on monetary easing, it’s a handful of people in the room,” she said. “It’s going to take more pain to build that political consensus around the fiscal stimulus.” Wray says he’d expected attitudes to start shifting after the last downturn, just as the Great Depression gave rise to Keynesian economics and the New Deal, but “it really didn’t change anything, as far as the policy-makers go.” “I think it did change things as far as the population goes,” he said, citing the anti-establishment campaigns of Sanders and Republican Donald Trump.

It might take another crash to change minds, Wray says.

‘Strange period’

MOST economists don’t expect an imminent US recession. But financial-market turmoil and America’s political upheaval have added to a sense that nobody has figured out a cure for the economy’s malaise. Bill Hoagland, a Republican who’s vice president of the Bipartisan Policy Center, has helped shape US fiscal policy over four decades at the Congressional Budget Office and Senate Budget Committee. He says a farm upbringing in Indiana helped him understand why “it’s engrained in a number of Americans outside the Beltway that you equate your expenditures with your revenue.” He also acknowledges that government deficits are different, and could be larger now to support demand, so long as there’s balance in the longer term. Most of all, Hoagland says he sees profound change under way. The “catastrophic event” of the 2008 crash may be reshaping American politics in a way that’s only happened a handful of times before. And economic orthodoxy has taken a hit too. “We’re going through a very strange period where all economic theories are being tested,” he said. Bloomberg News

Xi Jinping’s political economics: Working class are masters W

HEN China’s legislators head back to their provinces once Beijing’s annual parliamentary gathering concludes on Wednesday, they’ll be tasked with implementing the specific policies outlined and the less tangible philosophies of Xi Jinping that underpins them. Based on speeches given by the president during the National People’s Congress (NPC), the party’s mouthpiece Xinhua News Agency has started referring to “Xi Jinping political economics,” an eight-point clustering of themes, such as how to reconcile state control and market forces, or the need to appreciate the nation’s frontline workers. The priority: to build a peoplefocused common prosperity that will ease the widening gap between rich and poor.

Xi’s doctrine, if enshrined in Communist Part y orthodox y, would mark a fifth leg in the party’s thinking, following “Mao Zedong thought,” “Deng Xiaoping theory,” Jiang Zemin’s “three represents” and Hu Jintao’s “scientific outlook on development.” “Xi’s ‘political economics’ has reverberated through the Great Hall of the People throughout this year’s key political events,” Xinhua reported on Monday. “In X i political economics, socialism is the institutional guarantee, so that all Chinese people can benefit from economic development.” Here’s a r u ndow n on t he eight- poi nt platform using the words of X i as quoted in state media: 1. People centered: We have to arouse the enthusiasm of workers in the frontline—manufacturing

workers and migrant workers. That’s the essence of socialism. The working class are the masters of our country: Xi told the Shanghai delegation on March 5. 2. Common prosperity: There should be no one left behind in building a well-off society, even among ethnic groups with small populations: X i told the Heilongjiang delegation to the NPC on March 7. The next five years will be crucial for the government to “crack the tough bones” in the battle against poverty, Xi said on March 10 when meeting Qinghai delegates.

3. Public ownership and private ownership: Our policy of unwaveringly encouraging, supporting and guiding the nonpublic economy hasn’t changed, Xi said while meeting delegates from the China Democratic National Construction

Association and the All-China Federation of Industry and Commerce on March 4. Development of the nonpublic sector from small to big, and from weak to strong, is realized under the leadership of the party, Xi said the same day while meeting delegates from the China Democratic National Construction Association and the All-China Federation of Industry and Commerce.

4. New development concept:

We should protect the environment like protecting our eyes and treat the environment the way we treat our lives, Xi said to the Qinghai delegation.

5. Relationship between the government and the markets:

To deepen economic reform, it’s crucial to manage the balance between government policies and market forces well, Xi told the

Shanghai delegation. The government must manage its duties effectively while allowing the market its freedom, he added. 6. Open economy: China’s philosophy on economic growth will be driven by innovation, coordination, green development, openness and sharing, Xi told delegates from Shanghai, Heilongjiang and Qinghai. 7. New normal: The “new normal” of slower, more sustainable development is a time of challenge but also opportunities, Xi said March 4. Private companies should take the initiative and be more innovative to adapt to the new normal, Xi said. 8. Supply side: To push supplyside structural reform will be a tough battle, Xi said at a meeting with the Hunan delegation on March 8. The supply of unnecessary

and low-end output should be curtailed, while that of effective and mid-to- high end supply enlarged, Xi said. Will Xi thought work in helping China navigate a once-ina-generation economic shift away from a reliance on investment for growth to consumption and services? A problem is that he’s trying to cobble together incompatibles, says June Teufel Dreyer, a professor of political science at the University of Miami. Entrepreneurs in the nation became rich in part by exploiting workers, so what happens if they truly become masters, she asks? “No question that Xi has his eye on his legacy,” she said. “If he succeeds, Xi’s legacy may be almost as glorious as the over-the-top cult of Xi videos that are circulating. If he fails—hard times for China and possibly ignominy for him.” Bloomberg News

A8

Wednesday, March 16, 2016

The World BusinessMirror

news@businessmirror.com.ph

Russian planes getting ready to leave Syria

M

OSCOW—Russia’s defense ministry said on Tuesday that its military at the Russian air base in Syria is preparing for some of the planes and fighter jets to leave and return home following a pullout order from President Vladimir Putin. The statement came a day after Putin announced the withdrawal of most of the Russian forces from Syria, timing his move to coincide with the resumption of Syria peace talks in Geneva. The start of the negotiations in Switzerland on Monday offered Putin an opportune moment to declare an official end to the five-and-a-halfmonth Russian air campaign that has allowed Syrian President Bashar al-Assad’s army to win back some key ground and strengthen his positions ahead of the talks. With Russia’s main goals in Syria achieved, the pullback will allow Putin to pose as a peacemaker and help ease tensions with North Atlantic Treaty Organization member Turkey and the Gulf monarchies vexed by Moscow’s military action. At the same time, Putin made it clear that Russia will maintain its air

base and a naval facility in Syria and keep some troops there. Syria’s state news agency also quoted Assad as saying that the Russian military will draw down its airforce contingent but won’t leave the country altogether. The Syrian presidency said Assad and Putin spoke on the phone on Monday and jointly agreed that Russia would scale back its forces in Syria. It rejected speculation that the decision reflected a rift between the allies and said the decision reflected the “successes” the two armies have achieved in fighting terrorism in Syria and restoring peace to key areas of the country. The Syrian army said it would continue its operations against the Islamic State group, al-Qaeda’s Syria branch known as the Nusra Front and other militant factions in Syria

that have been designated as terrorist groups by the United Nations “with the same tempo.” On Tuesday Russia’s defense ministry said its military personnel is currently loading equipment and materiel on cargo planes and getting ready for the withdrawal. The ministry said the jets will be accompanied by military transport aircraft and will be making stops at airfields in Russia for refuel and technical checks, since some of them are stationed more than 5,000 kilometers away from the Syria base. Moscow did not indicate when the first planes are scheduled to leave. Announcing his decision in a televised meeting with Russia’s foreign and defense ministries, Putin said on Monday that the Russian air campaign has allowed Assad’s military to “radically” turn the tide of war and helped create conditions for peace talks. Putin didn’t specify how many planes and troops would be withdrawn. The number of Russian soldiers in Syria has not been revealed. US estimates of the number of Russian military personnel in Syria vary from 3,000 to 6,000. Also, Russia has deployed more than 50 jets and helicopters to its Hemeimeem air base, in Syria’s coastal province of Latakia. In a surprise announcement, Putin on Monday ordered the withdrawal of most Russian troops from Syria beginning Tuesday, less than six months after Moscow’s war planes began bombarding

RUSSIAN President Vladimir Putin (left) shakes hands with Russian Defense Minister Sergey Shoygu during their meeting in the Kremlin in Moscow, Russia, on Monday. Putin has ordered the start of the pullout of the Russian military from Syria starting on Tuesday. MIKHAIL KLIMENTYEV, SPUTNIK, KREMLIN POOL PHOTO VIA AP

forces arrayed against the Syrian government. Putin described the move in a televised meeting as a bid to expedite the Syrian peace process. Putin gave no timetable for the pullout, other than saying it would begin on Tuesday. Russia reportedly has some 4,000 military personnel in Syria. “We have paved the way for the peace process,” Putin said on Russian television during a meeting in Moscow in which he was flanked by Foreign Minister Sergei Lavrov and Defense Minister Sergei Shoigu. The withdrawal announcement comes as Syria nears the fifth anniversary of the conflict, which began in March 2011, morphing from street protests and a subsequent government crackdown to a brutal guerrilla campaign across much of the country. A fragile “cessation of hostilities” has been in effect in Syria since February 27, leading to a major reduction in violence, according to US and Russian officials. Both nations backed the cease-fire. The Russian president lauded the military campaign in Syria, saying the effort had allowed Assad’s government to retake hundreds of towns and villages and resulted in the destruction of “terrorist” arms depots and oil routes, among other accomplishments. Putin expressed confidence that the Syrian military and its allies— who served as boots on the ground as Russian war planes attacked from the skies—would be able to hold and consolidate gains made in recent months. At this point, the US doesn’t expect the Russian military will depart Syria in the coming months, according to a US official who spoke on condition of anonymity to discuss internal assessments. US intelligence officials believe Putin has ordered the withdrawal of Russian troops from Syria to pressure Assad to step aside and allow another government friendly to Moscow to come to power. Russia’s departure from Syria would likely result in the loss of territorial gains by Assad’s forces over the past six months. Washington officials have harshly criticized Russia’s involvement in the Syria war. President Barack Obama has called for Assad to step down and has provided money and arms to rebels fighting to oust the Syrian leader. But the Russian intervention has strengthened Assad’s hold on the country. At least 60 percent of Syrians still in the country reside in government controlled areas, according to various estimates, including Damascus, the capital, Homs, western Aleppo and the Mediterranean coastal area.

3k-6k US estimates of the number of Russian military personnel in Syria

The Russian deployment to Syria also became a showcase for some of Moscow’s latest military hardware, from fighter jets to cruise missiles to tanks. The major Russian military installations in Syria—an air base in northwest Latakia province and a naval base in the port city of Tartous—would “continue operating in “routine regime,” Tass reported, paraphrasing the president. It was unclear if Russian air strikes would continue. Russia has conducted thousands of air strikes since it began its Syrian air campaign on September 30. Russia said it was striking “terrorists,” but US officials said the Russian war planes were also hitting so-called moderate rebels backed by Washington and its allies, including Saudi Arabia and Turkey. Russia insisted that its strikes were exclusively against terrorist groups such as Nusra Front, the official al-Qaeda franchise in Syria, and Islamic State, the breakaway al-Qaeda faction that controls territory in Syria and neighboring Iraq. But rebels backed by the US and its allies often cooperate on the Syrian battlefield with al-Qaeda-style factions like Nusra Front. The pace of Russian air strikes has slowed down considerably since the February 27 cease-fire. Since then, violence in the country has declined by as much as 90 percent, US Secretary of State John F. Kerry said during the weekend. Just before the cease-fire was proclaimed, pro-government Syrian forces seemed poised to encircle the northern city of Aleppo, which has been divided between government and rebel control for almost four years. Russian air power also helped choke off rebel supply routes from neighboring Turkey, a fact that drew protests from Turkey, a major backer of rebel factions in Syria. Last November Turkey shot down a Russian fighter plane over the Syrian-Turkish border area, drawing angry condemnations from Moscow. Relations between Turkey, a Nato member, and Russia have been on the decline ever since. Russia has accused Turkey of aiding “terrorist” groups, including Islamic State, an allegation denied by Ankara. Syrian state news agency Sasa

said that the withdrawal was decided by Putin and Assad during a phone call. The two sides, Sana reported, agreed to “lower [the number] of Russian Air Force in Syria in [a way] that complements the current field stage and the continuation of the cessation of hostilities.” The Syrian government has extended so-called reconciliation deals to thousands of former rebels, affording them the opportunity to return to civilian life in state-held areas with amnesty in exchange for laying down their arms or joining pro-government forces. The pace of reconciliation deals has accelerated in recent months, the government says. Critics insist, however, that the reconciliation deals are little more than forced surrender and are taken to prevent starvation in opposition areas caused by the government’s use of siege tactics. Among the many foreign Islamist militants in Syria are several thousand Russian citizens, Moscow says. Russia said part of its motivation in Syria was to insure that Russian nationals radicalized in Syria did not return home to promote violence and instability on Russian soil. Still, the Russian air campaign drew withering criticism from the Obama administration, which said Moscow’s move was impeding process toward peace in Syria. At one point, Obama said Russia risked getting bogged down in a “quagmire” in Syria. Nonetheless, Russia has been a major partner with the US in trying to promote a peace process in Syria, which has been mired in war for almost five years. The Syrian conflict has helped destabilize the region and prompted more than 4 million Syrians to flee the country, contributing to a refugee crisis in Europe. “Nobody knows what is in #Putin’s mind, but the point is he has no right to be in our country in the first place,” Salim Muslet, spokesman for the High Negotiations Committee, the main opposition umbrella group at the peace talks in Geneva, said on the group’s Twitter page. Meanwhile, opposition activists reported impromptu celebrations had broken out across oppositionheld areas of the country after the news of Russia’s withdrawal. Analysts noted that Russia could decide to bolster forces in Syria anew if antigovernment forces posed a renewed threat to Damascus. “Russia keeps track of the situation in Syria and the Russian president can make a decision to beef up our [military grouping] there,” Viktor Ozerov, a Federation Council official on defense and security told RIA Novosti news agency. AP and Los Angeles Times/TNS

The World BusinessMirror

news@businessmirror.com.ph

Editor: Lyn Resurreccion • Wednesday, March 16, 2016

North Korea’s President Kim warns of impending nuclear, rocket tests

PEOPLE watch a TV screen showing North Korean leader Kim Jong Un during a news program at Seoul Railway Station in Seoul, South Korea, on Tuesday. AP/AHN YOUNG-JOON

S

EOUL, South Korea—North Korean leader Kim Jong Un has warned of impending tests of a nuclear warhead explosion and ballistic missiles capable of carrying atomic warheads, state media reported on Tuesday, in an escalation of threats against Seoul and Washington. The warning came as North Korea said it had made a breakthrough in its pursuit of a long-range missile capable of striking the US mainland. South Korea says the North has yet to develop a functioning intercontinental ballistic missile.

Kim issued the order for the tests “in a short time,” according to the Korean Central News Agency (KCNA). The KCNA report did not say if Kim gave specific dates for the tests. Meanwhile, the foreign ministers of China and Japan have reaffirmed

MORE DOCTORS ARE PRESCRIBING EXERCISE INSTEAD OF MEDICATION

B

OSTON—When Dr. Michelle Johnson scribbles out prescriptions: the next stop for many of her patients is the gym, not the pharmacy. Doctors treating chronic health problems increasingly are prescribing exercise for their patients—and encouraging them to think of physical activity as their new medication. In one such program run by a health center in Boston’s Roxbury neighborhood, primary care physicians, internists and psychologists prescribe access to a gym for $10 a month, including free child care, classes and kids programs. Providing affordable gym access for patients ensures compliance, said Gibbs Saunders of Healthworks Community Fitness, a nonprofit gym in Dorchester that has partnered with several health-care providers to help low-income residents fill their exercise prescriptions. Executives at the Whittier Street Health Center say low-cost access to a gym is important, since many residents’ income is low and 70 percent of those they treat suffer from chronic problems—such as obesity, highblood pressure, diabetes and depression. Life expectancy in Roxbury is 59 years—well-below the national average of 78.8 years. “Exercise is not a new medicine. It’s really an old medicine,” said Johnson, who prescribes exercise to patients at the Roxburybased health center. “But you know, I think we’re now coming to the point of understanding how important it is.” Monisha Long, who is morbidly obese and suffers from hypertension, got a doctor’s prescription for exercise and says she’s

gotten visible and dramatic results after more than two years of regular workouts. “I lost well over 150 pounds, and I’ve been keeping it off for the past couple of years,” she said, after working out on an elliptical machine at Healthworks. And Long cites other, lessvisible benefits. “I’m more energized,” she said. “As far as my energy, I feel like I’m stronger. I feel like I’m less tired. I feel like I can do almost anything now.” People who are physically active tend to live longer and are at lower risk of heart disease, stroke, Type 2 diabetes, depression and some cancers, according to the US Centers for Disease and Control and Prevention. Yet, fewer than one in four American adults exercises enough to reap those benefits, the agency says. Dr. Edward Phillips, a Boston physician, is so sold on exercise he pedals on a stationary bike that’s integrated into his office desk. Phillips said exercise is “like taking a little bit of Prozac—an antidepressant—and a little bit of Ritalin, which is a stimulant.” “Our bodies are meant to move,” he said. “Integrating movement into our day allows the system to work optimally. Part of the system that needs to work is our brain, and includes sleep, mood, cognition, ability to concentrate.” A prescription for exercise is a bargain, said Stephanie Dennis, who works out on a treadmill to stay fit. “$10 a month is what? $2 a week, $2$2.50 a week,” she said. “A lot of people pay that every day for coffee. It’s not a big sacrifice for something that you get big rewards from.” AP

their nations’ commitment to the full implementation of United Nations sanctions against North Korea over its recent nuclear tests and missile launches. China’s Foreign Ministry said on Tuesday that Chinese Foreign Minister Wang Yi and his Japanese counterpart, Fumio Kishida, also called for new talks with North Korea on nuclear disarmament. The ministry said that in a phone conversation on Monday, the two ministers also discussed the often-strained relationship between their countries, with Wang urging Japan to make “constructive efforts” to improve ties. Wang told reporters at a news conference last week that he saw “little ground for optimism” in the outlook for China-Japan relations. While giving no specifics, he accused Japanese leaders and politicians of “making trouble for China at every turn.” It is not clear if the tests would happen soon, given that any tests would likely invite harsher interna-

1,000 km

or less

The range of North Korea’s short-range missiles tional sanctions after the country was hit by the toughest UN Security Council sanctions in two decades in early March for a nuclear test and long-range rocket launch conducted earlier this year. Some of the North’s recent rhetoric was seen intended for a domestic audience to display government strength ahead of a major meeting of the ruling party in May. In the past, North Korea has typically conducted nuclear tests and rocket launches every three to four years. Even if the tests happen, analysts in Seoul said the nuclear warhead explosion that Kim referred to will, likely, be just a test of a warhead containing only a trigger device but lack-

ing plutonium or uranium. They said the North could also launch shorterrange missiles, but not one with an intercontinental range. Pyongyang, known for its trademark fiery rhetoric in times of tension with the outside world, has been stepping up its threats after Washington and Seoul last week began annual military drills that the North views as an invasion rehearsal. The drills, set to run until late April, are the largest ever. Last Wednesday North Korea’s main newspaper printed photos of what appeared to be a mock-up of nuclear warhead. State media on Friday quoted Kim as having ordered more nuclear explosion tests but again didn’t say when they would occur. Kim said “a nuclear warhead explosion test and a test-fire of several kinds of ballistic rockets able to carry nuclear warheads will be conducted in a short time to further enhance the reliance of the nuclear-attack capability,” KCNA reported. He made the comments while guiding a successful simulated test of a reentry vehicle, which is needed to return a warhead safely back into the Earth’s atmosphere from a longrange missile launch. Information from secretive, authoritarian North Korea is often impossible to confirm and there is virtually no way to check how genuine its claims are on developing reentry vehicle technology. Seoul’s Defense Ministry described North Korea’s claims as “unilateral,” saying the country has not developed re-entry vehicle technology. Spokesman Moon Sang Gyun said the assessment is based on an analysis of South Korean and US intelligence. He declined to elaborate. Analyst Lee Choon Geun at South Korea’s state-funded Science and Technology Policy Institute said the North might put an empty warhead on a rocket and test-fire it to see if the warhead survives the reentry and detonates as planned. While the North might test-fire shorter-range missiles with ranges of 1,000 kilometers or less, it is unlikely that it would test a rocket with intercontinental range as that would probably have to fly over neighboring countries, said Jin Moo Kim, an analyst at the government-funded Korea Institute for Defense Analysis in Seoul. AP

Brazil govt ‘frightened’ after huge protests

R

IO DE JANEIRO—A day after huge protest rallies urged the ouster of President Dilma Rousseff, her chief of staff on Monday acknowledged popular discontent with Brazil’s political class but said the flagging economy was the main reason behind the turnout. Jaques Wagner’s comments came at a news conference after Rousseff met with her closest advisers early on Monday as the government sought to explain what leading newspapers called the biggest political demonstration in Brazilian history. An estimated 3 million people took part in more than 100 protests nationwide, meaning Sunday’s anti-Rousseff demonstrations were larger than mass protests in 1984 demanding direct presidential elections amid the country’s military dictatorship, according to the respected newspaper Folha de S. Paulo. Analysts agreed that the dissatisfaction demonstrated by the protests complicates Rousseff’s already difficult position. She’s fighting impeachment proceedings in Congress amid the worst recession in decades and a sprawling corruption investigation closing in on key figures in her Workers’ Party. “The fact is that Sunday can be seen as a watershed moment, which frightens the government [and] pressures Congress,” Folha said in an editorial on Monday. “Surprised by the strong turnout on Sunday, the government has been put on alert that it needs to act quickly” to avoid Rousseff’s impeachment. Lower house Speaker Eduardo Cunha, a Rousseff foe, is expected to form a com-

DEMONSTRATORS parade large inflatable dolls depicting Brazil’s former President Luiz Inacio Lula da Silva in prison garb and current President Dilma Rousseff dressed as a thief, with a presidential sash that reads “Impeachment,” in São Paulo, Brazil, on Sunday. AP/ANDRE PENNER

mission to begin impeachment proceedings sometime this week. Wagner said the government was interpreting the Sunday’s high turnout as a sign that “the people are sick and tired of the political class.” But while “everything contributed” to pushing people onto the streets, “the main thing is people’s lives, meaning the economy,” he said. “If everything is great, citizens aren’t even looking,” he was quoted as saying by Globotelevision network’s G1 Internet portal. Although Rousseff has seen her approval ratings dip into the single digits, she has ruled out resigning, saying last week that it was objectionable to demand the resignation of an elected president

without concrete evidence the leader had violated the Constitution. The government hopes that progovernment demonstrations scheduled for Friday will help shore up Rousseff’s position. But, in a statement on Monday, the US-based Eurasia Group political and economic risk-consulting firm estimated there is 65-percent probability that Rousseff will not serve out her term, which ends in 2018. “We now think an impeachment vote will occur by May, and Rousseff will not survive it,” the statement said. Francisco Fonseca, a political-science professor at the Getulio Vargas Foundation university in São Paulo, believes Rousseff still has “a few cards.” AP

A9

IRAN FM: MISSILE TEST DID NOT BREACH U.N. RESOLUTION

C

ANBERRA, Australia— Iran’s foreign minister used a meeting with his Australian counterpart on Tuesday to reject a US argument that the test-firing of Iranian missiles last week violated a United Nations resolution. Mohammad Javad Zarif had a detailed conversation with Australian Foreign Minister Julie Bishop about legal and technical issues surrounding Iran’s test-firing of two ballistic missiles. The United States called a Security Council meeting on Monday to protest the launches, which Secretary of State John Kerry called a violation of UN resolutions that “could invite additional sanctions.” Samantha Power, the US ambassador to the United Nations, said after Monday’s closed meeting that the ballistic missiles “were designed to be capable of delivering nuclear weapons,” and called the launches “dangerous, destabilizing and provocative.” But Russia’s UN Ambassador Vitaly Churkin told reporters that Moscow had no information that the missiles could carry nuclear weapons and that there was no violation of the resolution. At issue is the Security Council resolution adopted after the Iranian nuclear deal was signed last year, calling for Iran not to launch any ballistic missiles capable of delivering a nuclear weapon. Zarif said that Iran had not violated UN Resolution 2231, but that the tests may have violated the resolution it superseded, 1929, which used different language. “First of all, it doesn’t use obligatory terms that are used in the Security Council, so Iran is not obliged by 2231— it calls upon Iran,” Zarif told reporters at Australia’s Parliament House. “Second, it creates a narrower definition of the missiles. That is, missiles that are designed to be capable—not capable—designed to be capable of carrying nuclear war heads,” he added. Bishop did not express an opinion on whether the tests had breached resolution 2231. “Having heard the foreign minister’s explanation, it is Australia’s position that should the UN Security Council wish to investigate this matter, then that would be the proper legal process for it to do so,” Bishop said. Power said that the missile tests merit a response from the Security Council, but that Russia’s contention that the launches did not violate resolution 2231 all but rule out any council action. Last Wednesday’s missile test was aimed at demonstrating that Iran will push ahead with its ballistic program after scaling back its nuclear program under the deal reached last year with the US and other world powers. On the first Australian visit by an Iranian foreign minister since 2002, Zarif welcomed Russia’s decision to begin withdrawing forces from Syria, where a fragile cease-fire is holding between state forces. “The fact that Russia announced that it’s withdrawing part of its forces indicates that they don’t see an imminent need to resort to force in maintaining the cease-fire,” Zarif said. “That in and of itself should be a positive sign. Now we have to wait and see,” he added. AP

A10 Wednesday, March 16, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Money laundering: Let the chips fall where they may

I

T is a supremely sophisticated operation conducted at a stratospherically high technological level on a global scale, over a long period of time, this money-laundering case one terminal of which now seems to be Rizal Commercial Banking Corp. (RCBC). Several Philippine casinos and a remittance company also seem to be involved. The Senate Blue Ribbon Committee is investigating the matter.

This is not a knee-jerk operation. Its timeline started on May 10, 2015, when four individuals—Enrico Teodoro Vasquez, Alfredo Santos Vergara, Michael Francisco Cruz and Jessie Christopher Lagrosas—opened dollar accounts, depositing $500 each, at RCBC Jupiter branch. It came to public knowledge on February 4, 2016, a full nine months later, when $81 million from the account of Bangladesh Bank held at the Federal Reserve Bank of New York is ordered to be transferred to the RCBC accounts of the four individuals: $30 million to Lagrosas, $19.9 million to Vergara, $25 million to Vasquez and $6 million to Cruz. Lagrosas on the same day remits $22.73 million to the account of William Go DBA Centurytex Trading. A remittance company, Philrem, begins remitting the money to various entities. Our authorities were not sleeping on the job. Immediately after February 16, 2016, when the Bank of Bangladesh governor sought the assistance of his Philippine counterpart, the Philippine Anti-Money Laundering Council, on February 19, 2016, began investigating the matter. Still, things could have been better. That bank in Sri Lanka to whom part of the loot, some $20 million, was being funneled immediately sensed that something was irregular, got in touch with the US Federal Reserve Bank, and immediately returned the money. Poor Bangladesh, the owner of the money, was saved at least that amount. Why couldn’t our own bankers have been anywhere as honest and efficient as their Sri Lankan counterparts? This scandal has the potential of giving not just Philippine banks, but the entire country, one big black eye. That, certainly, will be a black eye we do not need. It is absolutely necessary that our judicial machinery got into action— identify the guilty parties, prosecute them under the law, and mete out to them their just desserts. Along the way, we must also expose and punish the corporate entities, banks, casinos and remittance corporations, either for willful participation in the sordid act or for innocently falling victims to it themselves. Something may also be wrong with our own Anti-Money Laundering Act, Republic Act 9160. Are there loopholes through which the evil-minded can easily squeeze through? We are not the first people to ask this question. Congress has a job to do. We are awaiting the results of the Senate Blue Ribbon Committee hearing on the matter, crossing our fingers. The Anti-Money Laundering Council, the Department of Justice and its National Bureau of Investigation, our investigative agencies, and the courts— our entire justice system—have a job cut out for them. We hope they prove equal to the task.

Since 2005

BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Online Editor Social Media Editor Research Bureau Head Creative Director Chief Photographer Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Ruben M. Cruz Jr. Angel R. Calso Dennis D. Estopace Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

HOM

www.businessmirror.com.ph

REGIONAL OFFICES n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,

Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com

ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Printed by BROWN MADONNA Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila

Overseas Filipino workers get free SSS tags Susie G. Bugante

All About Social Security

T

O make it easier for overseas Filipino workers (OFWs) to apply for their benefits wherever they are stationed abroad, the Social Security System (SSS) is offering them free personalized luggage tags that can be claimed at SSS foreign representative offices (FROs), or during outreach events spearheaded by the SSS or local consular offices. The SSS luggage tags called SS# Tags have information printed on the card, such as the member’s name, social-security (SS) number, OFW coverage status and date of card issuance. For added convenience, the contact information of the issuing SSS FRO and OFW Contact Services Unit are printed at the back of the card. According to SSS Senior Vice President Judy See, who is also

concurrent head of International Operations, many OFW members have difficulty recalling their SS number, which is important for all their SSS transactions, such as contribution payments and availment of loans and benefits. Having the luggage tag that is encased in a leather card holder is a practical item for OFWs. Initially offered in 2014 at the

SSS branch at the Philippine Overseas Employment Agency in Mandaluyong City for departing OFWs, the luggage tags are now available at the SSS representative offices in United Kingdom; Hong Kong; Brunei; Taipei (Taiwan); Kuala Lumpur (Malaysia); Singapore; Riyadh, Jeddah and Al-Khobar (Saudi Arabia); Kuwait; Doha (Qatar); Abu Dhabi and Dubai (United Arab Emirates); Bahrain; Muscat (Oman); Rome and Milan (Italy); Toronto (Canada); and San Francisco (United States). See explained that the issued SS# Tags are valid as long as the SS Number Tag Project is in effect. OFWs also cannot avail themselves of replacement luggage tags from the same FRO. However, OFW members who transfer to another country can request for a new SS# Tag from the FRO in their new place of employment. The SS# Tag does not replace the Unified Multipurpose Identification System (UMID) Card, which OFW

UN’s chance to end war on drugs

O

B F H C, C G  E Z | TNS

UTDATED drug policies around the world have resulted in soaring drug-related violence, overstretched criminal justice systems, runaway corruption and mangled democratic institutions. After reviewing the evidence, consulting drug-policy experts and examining our own failures on this front while in office, we came to an unavoidable conclusion: The “war on drugs” is an unmitigated disaster. For nearly a decade, we have urged governments and international bodies to promote a more humane, informed and effective approach to dealing with “illegal” drugs. We saw a major breakthrough a few years ago, when the United Nations (UN) agreed to convene a special session of the General Assembly to review global drug policy. It is scheduled to begin on April 19. Unfortunately, this historic event—the first of its kind in 18 years—appears to be foundering even before it gets off the ground. What was supposed to be an open, honest and data-driven debate about drug policies has turned into a narrowly conceived closed-door affair. In the lead-up to next month’s session, the UN Commission on Narcotic Drugs in Vienna held a series of preparatory meetings with its 53 member-countries. The commission took responsibility for crafting a declaration to be adopted by all 193 UN members of the General Assembly, and should finish this week.

But most of these commissionled negotiations have been neither transparent nor inclusive. Input from key UN agencies working on health, gender, human rights and development—and the majority of UN member-states—was excluded. Likewise, dozens of civil-society groups from around the world were shut out of the meetings. Further, the draft declaration represents a setback rather than a step forward. It does not acknowledge the comprehensive failure of the current drug-control system to reduce supply or demand. Instead, it perpetuates the criminalization of producers and consumers. The declaration proposes few practical solutions to improve human rights or public health. In short, it offers little hope of progress to the hundreds of millions of people suffering under our failed global drug-control regime. If the UN wants to seriously confront the drug problem in a way that actually promotes the health and welfare of humanity, here are the proposals the General Assembly should adopt.

There is still time to get the UN special session back on track, and we hope that will happen. But even if the gathering does not live up to its full potential, we encourage heads of state and governments to test approaches to drugs that are based in scientific evidence and local realities. That’s the only way to arrive at an effective global drug-control system that puts people’s lives, safety and dignity first.

First, all UN member-states should end the criminalization and incarceration of drug users—an essential step toward strengthening public health, upholding human rights and ensuring fundamental freedoms. Second, all governments should immediately abolish capital punishment for drug-related offenses. It is a medieval practice that should be stamped out, once and for all. Third, UN member-states must empower the World Health Organization to review the scheduling system of drugs on the basis of science, not ideology. Most important, diplomats attending the special session on drugs next month must confront the obvious failure of most existing drug laws. The only way to wrest control of the drug trade from organized crime, reduce violence and curb corruption is for governments to control and regulate drugs.

members can apply for at no cost, provided that they have not been issued a biometric SSS ID or UMID card in the past. Over 1 million OFWs at present are registered in the pension fund as voluntary members. OFW members with a monthly contribution of P1,760—which is based on a reported income per month of at least P16,000—are entitled to join the SSS Flexi-Fund Program to supplement their SSS savings. If the OFW is duly enrolled in the FlexiFund, this information would also be reflected at the front of the card. For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55, which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays. Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante. bmirror@gmail.com.

This is not as radical as it sounds. Innovative experiments in drug regulation are under way around the world, and they offer important lessons to those who are prepared to listen. Switzerland’s national health plan, for example, now supports heroin-assisted treatment and maintenance doses for addicts in order to reduce harm to users. Portugal decriminalized the use of all drugs in 2001, with significant crime reduction and public-health benefits, including decreasing rates of HIV transmission. Dramatic changes in drug policy are also taking place across the Americas. In the US 23 states have legalized marijuana for medicinal purposes and four for recreational use. Most Latin American governments are taking steps, albeit timid ones, to decriminalize the consumption of some drugs. Uruguay has gone the furthest: it regulated its cannabis market from production to distribution to sale, with human rights at the center of the country´s strategy. There is still time to get the UN special session back on track, and we hope that will happen. But even if the gathering does not live up to its full potential, we encourage heads of state and governments to test approaches to drugs that are based in scientific evidence and local realities. That’s the only way to arrive at an effective global drugcontrol system that puts people’s lives, safety and dignity first.

Opinion BusinessMirror

opinion@businessmirror.com.ph

MicroEnsure as a microinsurance intermediary Atty. Dennis B. Funa

INSURANCE FORUM

T

HERE are three types of microinsurance intermediaries: the microinsurance brokers, the general agents and the institutional microinsurance agents. An example of a microinsurance broker is MicroEnsure Insurance Brokers Philippines Inc. (MicroEnsure), an insurance intermediary that designs and implements insurance for the poor in low- and middle-income countries. It is recognized worldwide as the pioneer in microinsurance broking.

In 2007 MicroEnsure set up business in the Philippines as a microinsurance-only broker. Since 2007, it has issued more than 9 million policies in more than 50 provinces, paying about P600 million in benefits. Its main office is in Jaro, Iloilo City. It introduces itself as a “specialist provider” of insurance to low- and middle-income markets. Its products range from life, health, property and weather-index products (using satellite data) for agriculture and calamity risks. It offers fire and calamity coverage, including micro housing insurance. For its calamity-insurance payments, it has paid about P334 million since 2008 to more than 60,000 families. These calamities are mostly the typhoons that ravage the country. For the devastating Supertyphoon Yolanda (international code name Haiyan), it has paid a total of more than P400 million in claims. The Insurance Commission has, in this regard, formulated the program called “Agarang Proseso, Benepisyo ay Sigurado.” It has partnered with cooperatives, local government units and microfinance entities. MicroEnsure issues about 30,000 new policies every month. MicroEnsure (Phils.) is a subsidiary of MicroEnsure Holdings Ltd. MicroEnsure Holdings was established in 2005. It was then known as Micro Insurance Agency, a whollyowned subsidiary of Opportunity International, a leading nonprofit microfinance organization based in the US. With its growing success, Micro Insurance was renamed MicroEnsure in 2008. Today it is a for-profit business organization with leading companies as its stockholders: AXA, a French multinational and investment banking firm; International Finance Corp. (IFC) of the World Bank Group; Omidyar Network, a “philanthropic investment firm” established in 2004 by eBay founder Pierre Omidyar and his wife Pam; and South African National Life Assurance Co. (Sanlam) based in Cape Town. Opportunity International

continues to be a minority stockholder. Sanlam is also known as the Sanlam Emerging Markets Proprietary Ltd. (SEM). In 2014 Sanlam, or SEM, took a 22-percent ownership stake in MicroEnsure Holdings Ltd. MicroEnsure Holdings has its head office at Cheltenham, United Kingdom. It raised $10 million in equity from IFC in 2012. In 2007 it was given a grant by the Bill & Melinda Gates Foundation. It prides itself on being “the world’s first and largest organization, whose exclusive focus is to address the mass market’s need to mitigate risk.” In 2013 MicroEnsure entered into a joint venture with Telenor Group, a telecommunications company based in Norway with 148 million mobile subscriptions as of 2012, to create MicroEnsure Asia to bring insurance products to masses in Asia. In 2014 Telenor became a stockholder by merging its 51 percent share in MicroEnsure Asia with MicroEnsure Holdings Ltd. As of April 30, 2014, it serves about 7.6 million enrolled clients in 13 countries. 4.8 million are in Africa, while 2.8 million are in Asia. It operates in Bangladesh, Ghana, Kenya, Madagascar, Malawi, Mozambique, Nigeria, Pakistan, Tanzania, Uganda and the Philippines. In India it offered hospital insurance for rural households at about $5 per person per year. In 2013, however, it withdrew operations from India. In the Philippines it rolled out a hospicash product that pays a fixed amount for each day of hospitalization at a premium of about $4 per person per year. Overall, it adds about 200,000 new clients per month worldwide. Among its standard products are life, memorial, property insurance, crop insurance, microhealth and mobile insurance. In 2005 it pilot- tested its first weather index crop insurance in Malawi against drought.

Far, far more than a scrapbook Teddy Locsin Jr.

FREE FIRE Continued from A1 Years passed, and I mean years, and then I was called in; and even then more than a year would pass again. I did not find it complete either. Some parts were missing, a key chapter at least after some of the partners had moved out and moved on. Not enough credit was given to Myrna Feliciano, the conscience and memory of Philippine law. I asked for help from Tess Herbosa, a contemporary of mine in the Firm, who watched our batch, and the ones before ours, all the way up to the partners—with a skeptical and an amused eye, and a sharp tongue to go with it. She is not asked to speak here, because sleeping dogs are best left to lie. So here is the book, finally. But not because it was delayed in publication, but because it is…finally… fully gestated and ripe for it. Sadly, one of the partners had died, and the literary one at that. I never verified it but Manny Abello had the

B C B | Bloomberg View

CONOMIC reforms are much like New Year’s diet resolutions: easily announced and easily forgotten. So, perhaps, it shouldn’t be surprising that the pronouncements that have emerged from China’s National People’s Congress—pledges to slash overcapacity, open up the financial system, accept lower growth—echo unfulfilled promises from previous party gatherings. Still, China prides itself on being different. The country can seemingly create new industries overnight, and has waged an anticorruption campaign that reportedly punished 300,000 officials in 2015. Why does a state that holds so much power have so much trouble following through on its reform pledges? Part of the answer is perception. Observers tend to hear more than is intended in China’s declarations. This year, for instance, many pundits have welcomed the shift from a hard GDP growth target to a supposedly more realistic range—between 6.5 percent and 7 percent. The real growth rate is almost certainly lower than that already, however. The numbers themselves

rumored distinction of having a major in literature, with emphasis on Richardson and his Bible-thick masterpiece, Clarissa Harlowe. The Firm then had intellectual snobs, with varied interests outside law. I have a particular recollection of one who was fascinated with the American civil war, in whose company you had to be quick to duck when a book flew impatiently out of his hand. To be sure, just as quickly, he commiserated with the target as if it was all beyond his control. The life of the law, said Holmes, is not logic but experience. If this book was just that—the narrative of one firm’s experience, it would be a scrapbook for the founding partners’ exclusive enjoyment; yet, another corporate gift no one will open; and the rest of the copies unloaded on working members of the firm to fatten up their Christmas package. But this book is far more than that. Had it been just that, even the

The Firm undertook for this big story to be told, a story not just about it but Philippine legal practice all told—and the politics, and the times, and the country in which all that unfolds in the distinctive late style of its main author. Ladies and gentlemen, ACCRA and the Post-Bellum Bar by Nick Joaquin—and everyone else involved. talent of Nick Joaquin would not be equal to the task. It is foremost about the life of the law in the Philippines. Indeed, halfway through this thick, and very elegantly designed and produced volume, it is still that—the life of Philippine law practice; well before five whip smart lawyers, relatively new to the practice, took it in a direction that was halfway the usual path and halfway the path rarely if ever traveled. Now we are in the story proper of the Firm, but just when the narrative might have turned into a scrapbook, Joaquin consults the competition for their two cents’ worth on the Firm; which the partners found/ either prickly, amusing or enlightening because they left it all there.

And just when that uncomfortable part is over, history intervenes in the narrative. And in a really big way; so much so that the country is the cover story of Time and Newsweek, and nightly on ABC, NBC and CBS news, regarding an election over which one of the partners was presiding. How did he get there? I wondered about that. So this is the story of legal practice in the Philippines. A story of one practice in the general practice, and of the six—or was it seven?— practitioners who started it. Not everyone gets into the firm name, though; hesitate a bit and suddenly there is no more space on the wall. It is throughout the story of a country, from the fall of one empire and the rise of another, and the unwelcome appearance of a third and its fall; and of that country’s three republics; the death of one, the birth of another and democracy reborn. The Firm undertook for this big story to be told, a story not just about it but Philippine legal practice all told—and the politics, and the times, and the country in which all that unfolds in the distinctive late style of its main author. Ladies and gentlemen, ACCRA and the PostBellum Bar by Nick Joaquin—and everyone else involved. It is his and their book, really.

Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission. E-mail: dennisfuna@yahoo.com.

Why is change so hard for China?

E

Wednesday, March 16, 2016 A11

tell us little: Since 2010, the government has missed its target by only 0.16 percent on average every quarter. We should expect similarly unbelievable consistency this year, regardless of what’s happening in the economy. In other cases, Chinese officials pursue reforms in ways that actually reinforce the status quo. To stimulate consumption and, thus, reduce the economy’s reliance on credit-fueled investment, the government plans to increase investment this year—in part, to keep workers at failing state companies employed. Authorities say they also want to support companies in more vibrant emerging industries with tax cuts. But they plan

to make up for the loss in revenue by issuing new bonds, thus, giving local governments more resources to coddle so-called zombie companies. The contradictions become clear in the way Chinese officials talk about reform. In a recent interview, respected central banker Zhou Xiaochuan was quoted as saying, “Because our country is moving from a centrally planned economy to a market economy… the government should play a bigger and better role.” The regime’s focus on control gives the impression that authorities can micromanage most parts of the economy. In fact, China’s central government has less sway than one might imagine over local governments, and not just because of the vast distances involved. Local officials are responsible for around 85 percent of government spending. Though central authorities do control roughly 40 percent of the revenue local governments receive, Beijing officials mostly have to rely on the bully pulpit, appeals to party unity and the threat of corruption

Part of the answer is perception. Observers tend to hear more than is intended in China’s declarations. This year, for instance, many pundits have welcomed the shift from a hard GDP growth target to a supposedly more realistic range—between 6.5 percent and 7 percent. The real growth rate is almost certainly lower than that already, however. The numbers themselves tell us little: Since 2010, the government has missed its target by only 0.16 percent on average every quarter. We should expect similarly unbelievable consistency this year, regardless of what’s happening in the economy. investigations in order to get their priorities implemented. Perhaps, more important are the cultural barriers to reform. Within the bureaucracy, there’s little reward for overseeing failure. Top officials may say they want to slash the overcapacity that’s dragging down the economy, but subordinates know the best way to get ahead is by meeting growth targets. Provinces that depend on steel, shipbuilding and coal companies for public revenue are already pushing back against plans to

shrink those industries. Entrepreneurs don’t want to admit failure any more than officials do. Even in good years, the US economy sees something in the range of 50,000 bankruptcies annually. China had barely 41,000 in the decade between 2003 and 2012, according to one study. Such numbers hardly suggest a system that actively addresses problems. None of this means that the government is powerless. Leaders can take a number of steps, both technical and cultural, to ensure reforms

gain more traction. First, they can do a better job of creating incentives for cadres to follow through. Rather than demanding that local officials provide video evidence that they’ve shut down unprofitable factories, for instance, central leaders can base promotions, in part, on reducing overcapacity. Simi larly, the gover nment could reward reformers who seek to highlight key problems, such as pollution, rather than trying to silence them. If the only avenue for success or advancement is to agree with a superior, bureaucrats will only impart the information their bosses want to hear. Finally, China is going to have to encourage more market-based risktaking. If authorities want Chinese companies to innovate, they have to tolerate some spectacular failures along with resounding successes. Investors will have to lose money, rather than relying on state-owned banks or governments to prop up failed ventures in perpetuity. Otherwise, change will remain little more than a slogan.