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ThursdaySeptember 18, 2014 Vol.28, 10 No. 40 Monday, 2015 Vol. 10 No. 354
Palace softens stance on tax-reform proposals L By Jovee Marie N. dela Cruz
INSIDE
egislators bared on Sunday a softening of the hardline stance Malacañang has taken against the proposal to scale back the country’s income-tax structure, saying that fiscal policy-makers—who earlier put their collective foot down on reducing the personal and corporate income-tax rates—agreed to take a fresh look at the reform measures.
sales growth BusinessMirror
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Monday, September 28, 2015 E 1
How to Spot Hidden opportunitieS
for SaleS GrowtH I
By Andris A. Zoltners, PK Sinha & Sally E. Lorimer
n the hunt for growth, every sales leader, whether new or seasoned, faces the same question. Where will the growth come from?
The best answers frequently come from looking at differences in performance, sales activity and market potential across different parts of the business. Better analytics enable companies to discover and take advantage of these hidden pockets of growth. Here are several examples:
Novartis gets more out of its
average performers. T he globa l health-care company identified salespeople who were outstanding per for mers and isolated a set of the behav iors that set that g roup apar t from average performers. The company developed a new sales process based on these behaviors. In a study, newly trained salespeople realized twice the growth
rate in sales when compared to a control group.
A manufacturing company accelerates growth among new hires.
The company tracked performance of salespeople over their first 20 months with the company to understand how quickly new salespeople became effective, and why. A key finding was that salespeople reporting to top-performing first-line managers performed much better than salespeople working with average-performing front-liners. The difference? Topperforming managers spent more time coaching in the field and arranged for mentorship from experienced team members. So the company established new coaching expectations for front-line
managers and implemented a tracking system to ensure accountability.
A telecom company gets more business from its high potential
customers. The company found “data doubles” for low-performing, high-potential customers—i.e., other customers who had a similar demographic profile but were buying much more. The company analyzed the purchase patterns and sales strategies at these moresuccessful accounts and shared the insights with the sales force. That information enabled salespeople to improve targeting the right products for underperforming customer accounts, thus, dramatically boosting sales opportunities. Compa n ies w i l l a lways be thinking about their next source of growth. Today’s world of big data enables companies to analyze sales force data for new and better sources of insight. Andris A. Zoltners is a professor emeritus of marketing at Northwestern University’s Kellogg School of Management. He and PK Sinha are cofounders of ZS Associates. Together with Sally Lorimer, they are the authors of The Power of Sales Analytics.
All boards need a technology expert By Jean-Louis Bravard
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eCenTLY I examined the professional experience of nonexecutive directors at the major banks in Britain. Like almost every other major industry today, banking relies on complex and expensive technology. So I was curious whether the individuals charged with corporate governance had any more than a layman’s knowledge of information technology (IT). I discovered that only one bank had a board member with some direct experience in technology. This is ty pical not only in banking but also in most major industries. Technolog y is the most important agent of change today; hardly any industry is immune to both its value-creating and disruptive potential. Yet the nonexecutive directors lack the experience required to challenge and support chairmen and Ceos in bringing the best technology to their business. Many industries today still
To reduce stress, embrace your inner type B By Victor Lipman
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TreSS and I have had a long, complicated relationship. early in my career, it often felt like my naturally lower-stress, quiet management style was an impediment to advancement. (I eventually worked in management for more than two decades and became a vice president.) over my decades in business I’ve often observed a similar dynamic: Classic high-octane Type A’s (aggressive, impatient, with high stress levels) most often ended up with top leadership roles, while extremely capable Type B’s (calm, patient, more relaxed) ended up in lesser positions. In assessing talent, we tend to default to a more predictable model of high-stress, high-intensity leadership. There are two big problems with this:
n Unchecked Type A behavior creates a persistently stressful environment for the team. It’s a recipe for employee disengagement. we all know Type A, high-intensity managers who can be counted on to deliver a tough project, but leave a trail of bodies in their wake. Ultimately that’s not an efficient long-term model. A chronically stress-packed management style breeds burnout and turnover. The best management is sustainable. Stress isn’t. The simple fact is that people don’t do their best work while anxious. n Many potentially excellent Type B managers are overlooked because they haven’t earned their stress merit badge. This can frustrate talented individuals. outstanding managers aren’t exactly in such abundant supply that we can afford to needlessly limit the pool.
Most of us, of course, aren’t exclusively Type A or Type B personalities but possess elements of both. we can consciously cultivate calm and lower the A volume while turning up the inner B. doing so brings changes that are both physical and emotional. The beneficial effects have been well documented since the 1950s. There’s a ripple effect: More relaxed behavior can yield improved leadership results. when backed by a solid commitment to quality and excellence, and supported by motivated employees who appreciate less stress in their working lives, Type B’s can be highly productive leaders.
employ outdated technology. often, only a multiyear, board-level sponsored effort can ensure a responsible IT overhaul. But without IT expertise at the director level, how can a board make educated decisions and take advantage of rapidly changing technology and consumer behavior? To ensure that corporate governance includes sufficient oversight of technology, I propose that companies follow these principles:
Add a technology expert to your
board. Give priority to individuals who continue to be involved with technology. Technology moves too fast for stale talent, however wellregarded. Be prepared to rotate this role at least every two years. Don’t rely on advisers. Many boards rely on technical advisers and consultants to assess their firm’s technology needs. Too often their advice is too generic.
Ask tough questions about technology spending<strong>.</
strong> Chief information officers are often not rewarded for taking
out old code and old hardware; instead they “layer” old technology on top of ancient technology, bad on top of worse—which leaves their company vulnerable to new companies that don’t have any obsolete inheritances to handle.
Understand cyber threats.
Unfortunately, new technology opens up vulnerabilities even as it creates value. Total security is not possible, but understanding the risk-benefit trade-off is essential. A recent survey found that 80 percent of boards do not even receive briefings on their company’s cybersecurity strategy. Briefings should happen periodically. Chairmen should test their company’s preparedness to handle technological change by mapping current and future challenges for their current nonexecutive directors. They will almost surely discover a gap between their team and the company’s needs.
measure reducing the individual and corporate tax rates, and assess their] impact,” Quimbo said. Previously, the DOF warned lawmakers that reducing the individual income and corporate tax rates will cause the government to lose tax revenues equal to 1.5 percent of the country’s gross domestic product (GDP), or P30 billion. This was why Malacañang, taking the cue from the DOF, rejected the long-pending bill mandating adjustments in individual See “Tax-reform,” A2
special report
Are you sure you want to be a manager? By Joseph Grenny
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enowned restaurateur danny Meyer likes to tell newly promoted supervisors that they have just been given the “gift of fire.” As a boss they now have a new and potent power, but Meyer wants to ensure they understand the appropriate—and inappropriate—uses of this gift. Fire, Meyer explains, can be used to warm and comfort. It can be used to illuminate darkness. And every once in a while, it is used to scorch—as when a leader speaks painful truths to others. I’ve met many newly minted supervisors, first-time Ceos and even recently elected political leaders— some of whom were ambivalent about taking on a new position. Here is some counsel on what to consider before you make the leap to manager: Count the cost. It’s fun to play on a bigger stage. More salary is nice. Taking on more complex problems
provides new satisfactions. And learning to lead people is a novel opportunity for growth. But think about your future before you give up the present. The deepest regrets I’ve heard from those who took the job were the loss of: n Tribe. when you become the boss your peers are no longer peers. This might unsettle valued friendships. when you are granted more power, you are implicitly agreeing that your loyalty is expected to be more to the enterprise than to your colleagues. Could you dismiss one of your former peers? Are you willing to embrace fully the requirements of this new authority? n Simplicity. As a manager, you will encounter a new set of trade-offs. when you take the job, you leave a world of value simplicity and enter one of value complexity. Because you are now a part of a management team, you will have to advocate positions with which you may not totally agree. Are you ready for that?
Take counsel from your fears.
If you’re worried about failure or criticism, that’s normal. But faking confidence doesn’t work. Authenticity—first with yourself and then with others—is the path to legitimate serenity. Acknowledge your deficiencies without dwelling on them. Then focus on your strengths. Check your motive. If you want power to gratify your ambition, your leadership will be all about you. You’ll fail to cultivate the legitimate trust of your team. You’ll guard your power jealously rather than being generous with it. That will hobble your capacity to be bold and decisive. danny Meyer says that the gift of fire isn’t “power over” it is “power to.” Leadership offers profound satisfactions—but only if undertaken fully, willingly and for the right reasons.
Joseph Grenny is a social scientist for business performance and the cofounder of VitalSmarts.
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© 2013 Harvard Business School Publishing Corp. (Distributed by The New York Times Syndicate)
china’s robot revolution E4 Monday, September 28, 2015
Lead tax-reform proponents at the House of Representatives and the Senate said the Department of Finance (DOF) is reconsidering the tax-reform proposals advanced by the legislative leaders. House Committee on Ways and M eans Chairman and Liberal Party Rep. Romero S. Quimbo of Marikina City and Senate Committee on Ways and Means Chairman Sen. Juan Edgardo M. Angara said legislators now wait for word from the DOF on the tax-reform measures. “The DOF was tasked to study further [the
Jean-Louis Bravard is a nonexecutive board member for London and Partners.
MONDAY MORNING Victor Lipman is author of The Type B Manager: Leading Successfully in a Type A world. He has his own consulting firm, Howling Wolf Management Training.
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ROBOT REVOLUTION
Epira amendment no panacea for power crisis, rate increases
SWEEPS CHINA’S FACTORY FLOORS
WORKERS assemble parts next to robot arms at an auto-parts manufacturing factory in Dafeng city in east China’s Jiangsu province. CHINATOPIX VIA AP
S
B K C | The Associated Press
HENZHEN, China—In China’s factories, the robots are rising For decades, manufacturers employed waves of young migrant workers from China’s countryside to work at countless factories in coastal provinces, churning out cheap toys, clothing and electronics that helped power the country’s economic ascent. Now, factories are rapidly replacing those workers with automation, a pivot that’s encouraged by rising wages and new official directives aimed at helping the country move away from low-cost manufacturing as the supply of young, pliant workers shrinks. It’s part of a broader overhaul of the economy as China seeks to vault into the ranks of wealthy nations. But it comes as the country’s growth slows amid tepid global demand that’s adding pressure on tens of thousands of manufacturers. With costs rising and profits shrinking, Chinese manufacturers “will all need to face the fact that only by successfully transitioning from the current labor-oriented mode to more automated manufacturing will they be able to survive in the next few years,” said Jan Zhang, an automation expert at IHS Technology in Shanghai. Shenzhen Rapoo Technology Co. is among the companies at ground zero of this transformation. At its factory in the southern Chinese industrial boomtown of Shen-
zhen, orange robot arms work alongside human operators assembling computer mice and keyboards. “What we are doing here is a revolution” in Chinese manufacturing, said Pboll Deng, Rapoo’s deputy general manager. The company began its push into automation five years ago. Rapoo installed 80 robots made by Sweden’s ABB Ltd. to assemble mice, keyboards and their subcomponents. The robots allowed the company to save $1.6 million each year and trim its workforce to less than 1,000 from a peak of more than 3,000 in 2010. Such upgrading underscores the grand plans China’s communist leaders have for industrial robotics. President Xi Jinping called in a speech last year for a “robot revolution” in a nod to automation’s vital role in raising productivity. Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial automation as well as development of a homegrown robotics industry. Some provinces have set up
their own “Man for Machine” programs aimed at replacing workers with robots. Guangdong, a manufacturing heartland in southern China, said in March it would invest 943 billion yuan ($148 billion) to encourage nearly 2,000 large manufacturers to buy robots, the official Xinhua news agency reported. Guangzhou, the provincial capital, aims to have 80 percent of manufacturing automated by 2020. A relentless surge in wages is adding impetus to the automation revolution. China relied on a seemingly endless supply of cheap labor for decades to power its economic expansion. Th at equation is changing as the country’s working-age population stops growing and more Chinese graduate from university, resulting in a dwindling supply of unskilled workers, annual double-digit percentage increases in the minimum wage and rising labor unrest. Deng said Rapoo’s wage bill rising 15 percent to 20 percent a year was one big factor driving its use of robots.
“Frontline workers, their turnover rate is really high. More and more people are unwilling to do repetitive jobs. So these two issues put the manufacturing industry in China under huge pressure,” he said. China’s auto industry was the trailblazer for automation, but other industries are rapidly adopting the technology as robots become smaller, cheaper and easier to use. It now only takes on average 1.3 years for an industrial robot in China to pay back its investment, down from 11.8 years in 2008, according to Goldman Sachs. Companies such as electronics maker TCL Corp. are using robots to produce higher-value goods. At one factory in Shenzhen, TCL uses 978 machines to produce flat-screen TV panels. At another TCL plant in Hefei, near Shanghai, steel refrigerator frames are bent into shape before being plucked by a blue Yasakawa robot arm that stacks them in neat rows for further assembly. Fridges and big washing machines have heavy internal components, so “if you use automated robots to make them, they also let you cut your labor intensity by a lot,” said TCL Chairman Tomson Li. China held the title of the world’s biggest market for industrial robots for the second straight year in 2014, with sales rising by more than half to 56,000, out of a total of 224,000 sold globally, according to the International Federation of Robotics. There’s plenty more room for explosive sales growth. China has about 30 robots for every 10,000 factory workers compared with 437 in South Korea and 152 in the
United States. The global average is 62. Beijing wants China’s number to rise to 100 by 2020. The switch to robots has raised fears that it will contribute to slowing job though there are few signs that’s happening yet. Deng said Rapoo hasn’t had to resort to layoffs. Rather, the company is just not replacing workers who quit. “It’s not simply replacing the operation of workers by robot. We do more than that. We are making a robot platform” in which humans and machines work together to make production more flexible, he said. On a recent tour of Rapoo’s factory, Deng pointed out the efficiencies. As a conveyor belt carried circuit boards out of an industrial soldering machine, a robot arm removed them from metal jigs and placed them on another belt. Human workers typically do this job in other factories, Deng said, but turnover is high because of the heat and repetitiveness. In a glass-walled room, robots assembled receivers for wireless mice, tasks that were previously done by 26 people, Deng said. Now, one or two humans supervise as a laser automatically fuses shut metal USB plug housings, four at a time, while steps away, robot arms slide the plugs into plastic sleeves. Automation means “accuracy can still remain very high and there are seldom failures for the robots,” said Deng. Boosting quality also helps China’s companies achieve another national goal of shedding their reputation as shoddy, low cost produc-
ers to compete with global rivals. Automation will allow Chinese factories to grab a bigger share of industries where accuracy and precision are crucial, such as aerospace, medical devices and optical components, said Derick Louie, of the Hong Kong Productivity Council. Makers of toys and other low-profit consumer goods, however, “probably will have to move outside of China due to rising labor costs and environmental taxation,” he said.
Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial automation, as well as development of a homegrown robotics industry.
PERSPECTIVE
E4
By Lenie Lectura
T BusinessMirror media partner
First of three parts
HE lawmaker who earnestly fought to have the 14-year- old Electric Power Industry Reform Act (Epira) amended has given up, saying that it was just, after all, “wishful thinking.” House Committee on Energy
Chairman and Liberal Party Rep. Reynaldo V. Umali of Oriental Mindoro—who was one of the speakers at a recent forum on “Why Energy Efficiency is Everyone’s Business”—said he tried, in many ways, to amend the Epira, but “there was too many who are against it.” “I tried hard to amend the Epira
through House Bill (HB) 4479. Initially, I was hopeful of amending it during the 16th Congress, but it hasn’t happened yet. For now, it is already just wishful thinking that amendments to the law will be passed,” Umali said in an interview. Among others, Umali’s HB 4479 seeks the following: Continued on A2
Umali: “For now, it is already just wishful thinking.”
MORE MERALCO CUSTOMERS SEEN SHIFTING TO PREPAID REYES: “We are looking to complete our 40,000 rollout by the end of the year. This was the allocation given to us by the Energy Regulatory Commission.”
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ower distributor Manila Electric Co. (Meralco) said its target of migrating at least 40,000 customers to its prepaid retail services by year-end is “doable,” thanks to the positive feedback of early shifters, according to its president. Meralco President Oscar S. Reyes said his company is looking to maximize the meter allocation granted by the Energy Regulatory Commission (ERC) on or before end-December. “The feedback is very good. Customers really find value to it, and we are looking to bring this experience to a lot more customers,” Reyes told the BusinessMirror in a chance interview. The utility firm was given the green light to roll out 40,000 electricity meters, which Meralco wants to finish by end of the year, at the latest. “We are looking to complete our 40,000 rollout by the end of the year. This was the allocation given to us by the ERC,” Reyes said. There are about 12,000 prepaid electric-service customers in some parts of Manila, Cainta, Quezon City, San Juan, Caloocan, Pasig and Cavite. The prepaid service is being offered on a voluntary basis. To avail, a customer may go to any of Meralco’s business center and pay an initial consumable load of P200. Customers may purchase load in denominations of P100, P200, P300, P500 and P1,000. They will receive a top-up confirmation from their mobile phones. If existing Meralco subscribers want to shift to prepaid electricity, no meter charge will be collected from them. On a daily basis, prepaid customers will receive a free See “Meralco,” A2
PESO exchange rates n US 46.7380
n japan 0.3887 n UK 71.2568 n HK 6.0310 n CHINA 7.3212 n singapore 32.7802 n australia 32.7871 n EU 52.2624 n SAUDI arabia 12.4628 Source: BSP (24 September 2015)
A2 Monday, September 28, 2015
BMReports BusinessMirror
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Epira amendment no panacea for power crisis, rate increases Continued from A1
■ Value-added tax (VAT) exemption of sales of electricity by generators and distribution units. ■ Full contracting of the distribution utility’s (DU) current and future energy and demand requirements from bilateral contracts, and requiring the DU’s contracts to undergo a bidding. ■ Suspension of Wholesale Electricity Spot Market in cases where the delivery and adequate supply of electricity maybe affected. ■ Reduction of threshold level of the Retail Competition and Open Access from 1 megawatt (MW) to 750 kiloWatts (kW) then to 500 kW. ■ The establishment of a one-stop-shop for processing of permits and licenses to ensure the timely completion of power projects. ■ Creation of an independent Consumer Advocacy Office within the Energy Regulatory Commission (ERC) to protect consumer inter-
ests and, at the same time, increase the number of ERC commissioners, create three divisions and expand its organizational structure. ■ Exclusion of small-capacity generation companies of not more than 20 MW from the mandated 15-percent public equity listing requirement. ■ Disallowing cross-ownership. ■ Authorizing the President, through the energy secretary, upon recommendation of the Joint Congressional Power Commission, to establish additional generating capacity in times of crisis. ■ Nonprivatization of Agus-Pulangi hydropower plants to ensure power supply in Mindanao.
Substitute measure
Because there are only a few months left before the May 2016 elections, Umali said he decided to “unbundle” his bill. “I dissected my original bill into three or four bills. I disintegrated my bill amending
Epira into doable and passable bills in this Congress and hopefully address other issues some other time,” he said. An official of a DU firm, who asked anonymity, noted that “there is simply no time left to amend Epira during the present Congress. That’s why Congressman Umali has given up and decided that it is easier to come up with substitute bills that are less controversial.” The substitute bills, Umali said, are now going the rounds. The House Committee on Energy has recently approved a substitute measure amending Epira. The committee report of the substitute bill, or an act declaring power infrastructure projects as projects of national significance, amending certain provisions of Republic Act (RA) 9136, is now being prepared for presentation in the plenary for second reading. Among the salient points of the substitute bill include the following: ■ Ensure timely completion of power
projects for energy security and minimize costs by declaring power infrastructures as projects of national significance, imbued with public interest. ■ The substitute measure also inserted new section, which provides that the power of the President may, upon the certification and recommendation of the energy secretary, classify certain power infrastructure projects, including but not limited to generation, transmission and distribution facilities, undertaken this act as projects of national significance which shall be entitled to the following incentives: ■ All real properties which are actually and directly used for the project will be exempted from any and all real-property taxes levied under RA 7160, or the local Government Code of 1991; ■ The sum of all local taxes imposed by a province, city or municipality pursuant to RA 7160, as amended, on the proponent should not exceed 50 percent of 1 percent of the gross sales or receipts of
the preceding calendar year; and ■ The required business permits, including any renewals thereof, should have been deemed to have been automatically granted or issued to the winning project proponent upon tender of the required taxes and fees to the appropriate local government unit. The amendment will also include the proposal of Nacionalista Party Rep. Henry Oaminal of Misamis Occidental prohibiting the privatization of Agus-Pulangi hydroelectric power complex in Mindanao. When sought for comment, Department of Energy Officer in Charge Zenaida Monsada said harmonizing laws pertaining to the power sector could be a better approach than amending Epira. “Epira is huge. We have many other laws related to the power sector. What could be better perhaps is to look at how to harmonize these. Separately, it is also worth looking at how to improve further these other laws,” Monsada said in an interview. To be continued
Pinoys are well-traveled, big spenders–UNWTO report By Ma. Stella F. Arnaldo
Special to the BusinessMirror
F
ILIPINOS are one of the well-traveled groups in the world, and spend quite a large amount in the destinations they visit. In the latest report of the United Nations World Tourism Organization (UNWTO), the Philippines was recognized as a source market “which showed double-digit growth in expenditure,” ranking it behind Saudi Arabia, Norway, Sweden, Spain, India and Taiwan. In 2014 Filipinos spent $12 billion (P552 billion) in their travels abroad, up 54 percent from what they spent in 2013, as per the UNWTO report of August 2015. This bumps up the Philippines to 29th place in the list of top spending markets, from 31st place in 2013. The growth in expenditure was also larger than 2013, when Filipinos’ spending grew by some 20 percent. China was ranked as the fastest-growing source market for tourists in 2014, as well as the world’s top spenders since 2012. “Chinese travelers spent a record $165 billion abroad in 2014—an exceptional 27-percent increase over 2013,” the report added. Following China, the other top spenders were the US ($110.8 bi l l ion), Ger many ($92.2 billion), the United Kingdom ($58 billion), Russia Federation ($50.4 billion), France ($48 billion), Canada ($34 billion), Italy ($24 billion), Australia ($26.3 billion) and Brazil ($26 billion). In terms of outbound travel, UNWTO data sent to the BusinessMirror indicated that Filipinos traveled to the following countries last year: Hong Kong (634,744 Filipino tourists, but down 10 percent from 2013); Malaysia (618,538, up 11 percent); South Korea (434,951, up 8.6 percent); Macau (262,853, up 2.7 percent); Indonesia (235,248, up 2.7 percent); the US (219,632, up 9.5 percent); Japan (184,2014, up 70 percent); Russia (162,990, up 9.2 percent); Taiwan (136,978, up 37.4 percent); and Vietnam (103,403, up 3 percent). No data for 2014 were available for Singapore, Thailand and Bahrain, which in previous years, recorded significant numbers of Filipino tourists. In the first half of the year, the Philippines ranked fourth in Southeast Asia in terms of growth in international tourist arrivals at 9 percent. It follows Thailand (up 30 percent), Myanmar (up 17 percent in the first quarter 2015), and Lao PDR (up
13 percent). As a region, Southeast Asia saw a 5-percent increase in tourist arrivals during the period January to June 2015,” the latest UNWTO World Tourism Barometer said. Total international tourist arrivals grew by 4 percent to 538 million, with Europe, Asia and the Pacific, and the Middle East all recording 5-percent growth in international arrivals, and the Americas, 4 percent. “Limited data available for Africa points to an estimated 6- percent decrease in the number of international tourists in the region” In spite of this overa l l growth, said the UNWTO, “results by destination are rather mixed. Safety and security remain a global concern while the economic scenario is comparatively more volatile with the recovery of advanced economies contrasting with the slowdown of emerging economies. Tourism demand has also been impacted by lower oil prices and currency fluctuations.” UNWTO Secretary-General Taleb Rifai said in a news statement: “These results show that, despite increased volatility, tourism continues to consolidate the positive performance it has had over the last five years and to provide development and economic opportunities worldwide.” He added: “As UNWTO [meets] in Medellin, Colombia, for its 21st General Assembly, this is the appropriate moment to call for a stronger support to tourism as the sector has the potential to deliver on some of the most pressing challenges of our time, namely job creation, economic growth and social inclusion.” The UNWTO has projected the number of international tourist arrivals worldwide to rise by an average of 3.3 percent annually, or 43 million a year, from 2010 to 2030. With these growth estimates, international tourist arrivals worldwide will likely hit 1.4 billion by 2020, and 1.8 billion by 2030. “The strongest by region will be seen in Asia and the Pacific, where arrivals are forecast to increase by 331 million to reach 535 million in 2030 [up 4.9 per year],” the UNWTO stressed. Due to the region’s faster growth, Asia and the Pacific see its global market share in arrivals rise to 30 percent of total in 2030, from 22 percent in 2010. The United Nations has proclaimed September 27 as World Tourism Day, recognizing the tourism industry’s importance in generating economic growth. 2015 marks the 35th year of the annual celebration.
LARGEST DISPLAY OF ORIGAMI LANTERNS Kevin Tan, Megaworld first vice president and head of commercial division, puts the last set of origami lanterns in a dragon-shaped display. The “Lantern of Hope” at Megaworld’s Lucky Chinatown mall in Binondo, Manila, broke the Guiness World Record for the largest display of origami lanterns. The dragon-shaped display was created to commemorate the Mid-Autumn Festival, a Chinese celebration marked by family reunions and the giving of mooncakes. NONIE REYES
China vows billions of development dollars, debt forgiveness
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NITED NATIONS—China’s president on Saturday pledged billions in aid and said Beijing will forgive debts due this year in an effort to help the world’s poorest nations, as world leaders begin to seek the trillions of dollars needed to help achieve sweeping new development goals. President Xi Jinping spoke at a global summit that on Friday launched the nonbinding goals for the next 15 years. Xi and others spoke as the UN gathering began to shift focus from development to the high-powered General Assembly meeting that begins on Monday with speeches by Xi, President Barack Obama, Russian President Vladimir Putin and Iranian President Hassan Rouhani on the first morning alone. Obama and Putin will meet on Monday. The prospects
Meralco. . .
for any meeting between Obama and Rouhani, even a handshake, remained unclear. Rouhani arrived on Saturday and immediately was encouraged by UN Secretary-General Ban Ki-moon to have Iran step up to help achieve political settlements to the grinding conflicts in Syria and Yemen, where Iran has influence. The Islamic republic is a top ally of the Syrian government of President Bashar al- Assad and supports Shiite Houthi rebels who have held parts of Yemen for months. Iran’s president said in his address that the recent deal with world powers on its nuclear program “has created suitable conditions for regional and international cooperation,” including on protecting the environment. As world leaders met quietly behind the scenes, others lined up to express support for the new development
Continued from A1
text message informing them of their remaining prepaid amount. The customer will also receive a warning three days before estimated depletion of load and disconnection. Based on its rules, customers will be allowed to experience the prepaid service on a trial basis for six months. Thereafter, they may continue to avail themselves of the service or revert to postpaid. Anticipating a huge demand for prepaid electricity service, Meralco asked the ERC to authorize another 100,000 meters for households interested in the service. Its application, however, is still pending with the agency. Meralco needs to file for approval of meter purchase and installation before it can roll out the service across its franchise area. The utility allotted $7 million in 2012 for the deployment of the service, covering technical and
commercial tests, as well as the commercial rollout for the 40,000 meters. It tapped General Electric Co. as the system integrator for the advanced metering structure of the service; Orga Systems for billing operations, and Ecologic Analytics for the meter data-management system. The prepaid service offering will enable customers to budget their electricity consumption. The system also informs consumers if they need to reload immediately to avoid disconnection. Prepaid electricity is also being used in other countries such as Indonesia, Australia and New Zealand, Meralco said. Meralco distributes power in Metro Manila, Bulacan, Cavite and Rizal, as well as parts of Batangas, Laguna, Quezon and Pampanga. “We will see whether we can invite other distributors to also offer the prepaid service,” Reyes said. Lorenz S. Marasigan
Tax-reform. . .
push that aimed to eliminate both poverty and hunger over the next 15 years. They replace a soon-to-expire set of development goals whose limited success was largely due to China’s surge out of poverty over the past decade and a half. China’s president vowed to help other countries make the same transformation. Xi said China will commit an initial $2 billion to establish an assistance fund to meet the post-2015 goals in areas such as education, health care and economic development. He said China would seek to increase the fund to $12 billion by 2030. And Xi said China would write off intergovernmental interest-free loans owed to China by the least-developed, small island nations and most heavily debt-burdened countries due this year. AP
Continued from A1
and corporate income-tax rates, saying the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenuereducing legislation.” But following several calls to scale back the individual and corporate tax rates, President Aquino last Thursday met with reform proponents Quimbo and Angara to convince the Executive on the merits of their reform proposals. According to Angara, he and Quimbo presented before President Aquino “various arguments and reasons for the reform, from the level of individual households at the microlevel and the benefits to society and the economy at large.” “We also emphasized that the real incomes of regular employees had been eroded since 1997 when the tax code was enacted into law,” Angara said. The Philippines owns the secondhighest personal income-tax rate in the region at 32 percent, next to Thailand and Vietnam’s 35 percent, and the highest value-added tax rate of 12 percent
as the country’s individual income-tax bracket has remained unchanged since 1997. The House version of the measure seeks to recast the income tax for compensation-income earners, the selfemployed and professionals, as well as corporations through simplification of tax tiers and rates while relating these to inflation. Under the bill, public and private workers earning P180,000 and below will be completely tax-exempt. In the current setup, those earning P10,000 or less per month pay 5-percent income tax. The bill also reduces the income-tax rate of those earning above P180,000 to P500,000 and above P500,000 to P10 million from the current 30 percent to 9 percent and 17 percent, respectively. It also provides that a 30-percent tax will be paid by those earning P10 million annually. Currently, those with yearly earnings of P500,000 and above pay 32-percent income tax. The measure will also reduce the corporate income-tax rate from 30 percent to 25 percent.
Economy
A4 Monday, September 28, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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House starts plenary deliberations on proposed ₧3.002-T 2016 budget
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By Jovee Marie N. dela Cruz
he House of Representatives is set to start today the plenary deliberations on the proposed P3.002-trillion national budget for 2016. House Committee on Appropr iations Chair man and Liberal Party Rep. Isidro Ungab of Davao s a id t h at t he lower chamber’s plenary debelmonte liberations on House Bill 6312, or the proposed 2016 General Appropriations Act (GAA), will be conducted from Monday to Friday. “We will start plenary deliberations tomorrow [Monday]. Debates on the 2016 national budget will immediately follow after my sponsorship speech,” Ungab said on Sunday. According to Ungab, the 2016 GAA
will be signed into law by December. “We intend to approve the budget before the end of the year as what Congress has done in the past five years,” the lawmaker added. Ungab also assured that all lawmakers—allies and nonallies alike—will have a free and independent discussions on the proposed budget. “Hopefully, the plenary debates and voting on second reading of the national budget will have been done by the time that [certificates of candidacy filing from October 12 to 16] candidacies for the May 2016 elections are being filed,” Ungab said. The Development Budget Coordination Committee (DBCC), the interagency body that determines the overall economic targets, expenditure levels and budget of the government, is expected to be present during the
first day of the plenary deliberations of the 2016 budget. Members of the DBCC are composed of Budget Secretary Florencio B. Abad as chairman; Director General Arsenio M. Balisacan of the National Economic and Development Authority as cochairman; and Executive Secretary Paquito N. Ochoa Jr., Finance Secretary Cesar V. Purisima and Bangko Sentral ng Pilipinas Amando M. Tetangco Jr. as members. Earlier, Abad said the proposed budget for 2016—which is 15.2 percent higher than the P2.606trillion 2015 national budget— is the Aquino administration’s blueprint for greater inclusive growth and reform expansion in the country. Based on allocation by sector, social services will have the biggest budget allocation of P1.1059 trillion, which is 36.8 percent of the proposed budget. It covers education, health-care housing and social welfare, and employment. Economic services took the second-largest budget allocation with P829.6 billion, which is 27.64 percent of the proposed budget. Transport and communications infrastructure will get the bulk of this budget.
General Public Services will get P517.9 billion, debt burden P419.3 billion, and interest payment P392.8 billion. Last, Defense will get P129.1 billion. This allocation will fund the Armed Forces of the Philippines modernization in light of the territorial disputes in the West Philippine Sea (South China Sea). By department allocations, the top 10 departments are the department of Education, P435.9 billion; Public Works and Highways, P394.5 billion; National Defense, P172.7 billion; Interior and Local Government, P154.5 billion; Health P128.4 billion; Social Welfare and Development, P104.2 billion; Agriculture, P93.4 billion; Finance, P55.3 billion; Transportation and Communications, P49.3 billion; Environment and Natural Resources, P25.8 billion; and of Science and Technology, P18.6 billion. Meanwhile, the minority bloc, particularly the Makabayan bloc, vowed to fully scrutinize the proposed 2016 budget. Party-list Rep. Terry Ridon of Kabataan said, “We fully prepared to interpellate the 2016 budget, particularly the lump sums lodged in different executive agencies.”
Members of the Makabayan bloc include Rep. Antonio Tinio of ACT Teachers, Party-list Rep. Fernando Hicap of Anakpawis, Reps. Neri Colmenares and Carlos Isagani Zarate of Bayan Muna, Reps. Luzviminda Ilagan and Emmi de Jesus of Gabriela and Ridon. On his part, Speaker Feliciano Belmonte Jr. urged members of the lower chamber to attend the two-week marathon plenary deliberations of the proposed 2016 budget. “A text brigade has been made to remind our colleagues to attend the remaining sessions in the next two weeks. Let us all be there to show support to approve the national budget for next year,” Belmonte said. The plenary session will begin at 1:30 p.m. today (Monday). On Tuesday and the preceding days, deliberations will start at 10 a.m., until the national budget is approved on second reading. Belmonte also expressed confidence that next year’s proposed national budget will be approved on second reading before Congress goes on a three-week recess starting October 10 to give way to members filing their certificates of candidacy.
Budget watchdog alarmed by lump-sum appropriations in ₧3-T 2016 national budget By Estrella Torres
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udget watchdog Social Watch Philippines (SWP) has raised concern on the presence of various lump sum appropriations “that can be used for election purposes” in the proposed P3.002 trillion national budget for 2016. Prof. Leonor Briones, former national treasurer and SWP convener, said the 2016 proposed budget is marred with lump-sum appropriations, such as special purpose funds, unprogrammed funds and automatic appropriations, as well as Priority Development Assistance Fund- and Disbursement Acceleration Program-like allocations. She said the “overstatements, budget errata and redefinition of savings, remains a significant challenge in exacting accountability in spending the national budget under a development framework. We call on the citizens to join us in keeping the 2016 budget under close scrutiny especially in light of the election season which has actually started this year.” Briones said despite the huge increase in budget allocation, reaching P10.34 trillion in the last five years, the government has been remiss in its commitment to reduce
poverty based on the Millennium Development Goals (MDGs). “The reckoning year of the MDGs shall conclude with alarming scenarios given the government missing its MDG poverty target of 17.2 percent by this year and its inability to achieve targets in 19 out of 28 indicators,” Briones said. She said the Alternative Budget Initiative has urged Congress to intervene in budget deliberations, so the government can fund appropriate programs and projects that can improve people’s lives. “We also want to ensure that the national budget will serve its purpose as an equalizer that addresses inequality and socioeconomic problems tackled by the MDGs,” Briones said. She added: “Much is left to be desired in the 2016 proposed budget, which can be utilized for election spending purposes.” “As the national budget will reach the P3-trillion threshold for next year, we urge the House and Senate to consider and endorse civil society alternative budget proposals, which aim to finance the MDG drawbacks that have long hampered our pursuit toward sustainable development, reduction of inequality and eradication of extreme poverty,” she said.
Senate bill seeks to enhance Owwa services to OFWs ANGARA: “Once this bill becomes law, the new Owwa would have a clear mandate that the OFWs and even the whole country could truly trust.”
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en. Juan Edgardo “Sonny” Angara has sponsored a bill that seeks to institutionalize and strengthen the government's support to overseas Filipino workers (OFWs) and their families by introducing reforms to the Overseas Workers Welfare Administration (Owwa) charter. Under the proposed measure, Owwa is declared as a national government agency and an attached agency of the Department of Labor and Employment “vested with a special function of developing and implementing welfare programs and services that respond to the needs of its member-OFWs and their families.” Since 1980, Owwa is an independent financial agency that manages the Owwa Fund, or the welfare fund of overseas workers and provides services to its contributing members in the form of loans and insurance. It is entirely self-funded through the contributions of its members and receives no allocation from the national government. “Hindi lamang po pangongolekta ng kontribusyon ang gawain ng Owwa. Mandato po ng Owwa na tiyakin ang kaligtasan at kapakanan ng OFWs. Kaya ang sabi naman ng Department of Budget and Management [DBM] at ng Governance Commission, ang Owwa ay isang NGA, o national government agency at nararapat na pinopondohan ito ng gobyerno tauntaon[Owwa’s role is not limited to collection of contributions, but it is also mandated to assure the safety and wellbeing of OFWs. That’s why we told the DBM and the Management Governance Commission that Owwa is a government agency that should be funded by the government every year],” Angara said, acting chairman of the Senate Committee on Labor, Employment and Human Resources Development. Angara’s bill also seeks to include the reitegration of OFWs as one of the core programs of Owwa, mandating that not less than 10 percent of the total collection will be used for the reintegration program every year. The bill further provides that the Owwa fund can only be used to exclusively serve the welfare of member-OFWs and their families, and ensures transparency in the utilization and management of the funds. “Kapag naisabatas ito, magkakaroon ng isang bagong Owwa na malinaw ang mandato at tunay na mapagkakatiwalaan ng OFWs at maging ng buong bansa (“Once this bill becomes law, the new Owwa would have a clear mandate that the OFWs and even the whole country could truly trust),” Angara said. Recto Mercene
PHL can become an Asean economic powerhouse–IRO
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he Philippines has a strong chance to become one of the economic powerhouses of the Asean region if the country takes advantage of its demographic sweet spot and make more investments on human capital development, the Investor Relations Office (IRO) said. “Starting this year until 2050, the Philippines is said to be within the ‘demographic window,’ loosely defined as a period when a great majority of the population are of working age,” the IRO said. Editha Martin, executive director of the IRO, said the government’s growing budget for human capital development shows the intention to further improve the quality of our workforce.
It also reflects the government’s desire to make the economy reap the potential demographic dividends, she added. “Consistently rising investments in health and education will help ensure that the Philippines does not miss out on the opportunity offered by its entry to the demographic window,” Martin said. The IRO said that based on official projection, the country’s working-age population—or those between 15 and 64 years old—this year accounts for 66.6 percent of the total population of 101.6 million. It further said that the share of the working-age population is expected to rise to 68 percent of 110 million people in 2020, and further to 70.6 percent
of 125.3 million people in 2030. “Because the number of workforce far outweighs that of dependents, the increase in incomes may accelerate. But this can only happen if there is a good quality of labor force,” the IRO said. Economic Planning Secretary Arsenio M. Balisacan agreed, and he stressed the need to sustain the trend of rising investments in human capital development. “We need to understand that having a fast-growing working-age population is a boon for the economy, but only if we do two things: invest more and more in human capital development and make sure the job opportunities match the skills of the people,” Balisacan said. Bianca Cuaresma
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Monday, September 28, 2015 A5
Senate set to OK bill to revamp agri fund
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By Recto Mercene
he Senate is set to approve a measure that would reform a multibillion-peso fund financed by tariffs collected from rice and sugar imports to ensure that funds would go to legitimate farmers and fishermen.
Sen. Ralph G. Recto said Senate Bill 2951, which is being debated on the Senate floor, “will not just extend the effectivity of the Agriculture Competitive Enhancement Fund [Acef], but make it effective.” Conceived as a safety net when the country joined the World Trade Organization, the Acef was created by Republic Act (RA) 8178 in 1996 to assist farmers affected when protectionist walls came crashing down as a result of the Philippine ratification of the General Agree-
ment on Tariffs and Trade. It was to be funded by “in-quota tariffs” collected from imported commodities, such as rice, placed under the restricted Minimum Access Volumes (MAV) that the Philippines imposed. In February 2008, RA 9496 extended the life of RA 8178 until December 31, 2015. In his cosponsorship speech, Recto said that, by May 15, 2013, total actual collections of Acef has reached P11.8 billion, of which P10.3 billion
was from MAV quotas and P1.2 billion was from the so-called sugarconversion fees. But, according to the Department of Agriculture and farmers’ groups, there were some P10 billion more in MAV in-quota tariffs, which were collected but was neither remitted to the Treasury, nor booked as Acef proceeds. Of the P11.8 billion that was officially reckoned as Acef collections up to the summer of 2013, some P8.9 billion was disbursed by Acef Executive Committee. Included was P2.6 billion as grants to local governments, government corporations and state colleges. Also approved was P5.9 billion worth of loans to 304 groups, which, except for 10, were private corporations. Subsequent audit reports on the Acef, however, are littered with adverse findings like “dismally low repayment rate,” “double recording of loan releases” and “loans without
collateral,” Recto said. “Some grantees have pulled a Houdini and can no longer be found. There were P2.5 billion worth of loans covered by letters of confirmation, whose addressees could no longer be found,” he said. In one case, proponents of a P63million loan “have migrated to the Great Beyond,” leaving P58 million in payables, the senator said. “Of the 294 private parties who were granted a total of P4.4 billion worth of loans, only 23 had fully paid as of December 2011. Of the remaining 271 private borrowers, only 15, or 5 percent of the total, had no arrears,” Recto said. “As a result, P2.2 billion in loans was already due and demandable three years ago. In all, outstanding arrears already hit P5.1 billion three years ago,” he added. Despite these irregularities, Recto said it is not yet time “to write the requiem for Acef.” What must be written is the law reforming it.”
The senator said Acef still has balance of P3.8 billion as of end-2014. “Second, and more important, the concept of earmarking tariffs for local development remains valid,” he said. Recto said all measures to reform and revamp Acef were incorporated in the bill principally crafted by Sen. Cynthia Villar, chairman of the Senate Committee on Agriculture and Food. “With her experience in restructuring, no person is more qualified to write the prescriptions than her, as she has the head of a banker and the heart of a farmer,” Recto said. “More stringent safeguards were put in place by Villar. For example, in the bill, there is a ceiling of P5 million per project. Gone is the era of megamillion-peso unsecured loans,” he added. Another important provision in the bill, Recto said, is the revamp of the membership of the Acef Executive Committee. “The chairman of the Senate and
Philippine trade repository portal to go live in October
Retail prices of construction materials posted slight decline in August–PSA
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By Cai U. Ordinario
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etail prices of construction materials in Metro Manila continued to decline in August, according to the Philippine Statistics Authority (PSA). PSA data showed that the Construction Materials Retail Price Index (CMRPI) in the National Capital Region (NCR) dropped by 0.4 percent in August. The decline in August was larger than the 0.3-percent contraction posted in July 2015. In August 2014 the CMRPI grew by 1.5 percent. Data also showed that the decline was due to the 1.7-percent contraction in the prices of electrical materials—one of the heavily weighted sectors in the CMRPI. “Slower annual increments were noted in the corresponding indices of carpentry materials and painting materials and related compounds at 1.5 percent and 0.5 percent, respectively,” the PSA said. On a monthly basis, the CMRPI in Metro Manila posted flat growth due to cheaper electrical and masonrymaterial prices. The PSA also said there was a 0.1-percent decrease in the indices of painting materials and related compounds, plumbing materials, and tinsmithry materials. However, the indices of carpentr y materials and miscellaneous construction materials inched up by 0.1 percent and 0.5 percent, respectively. “Prices of cement, paint thinner, GI [galvanized iron] pipes and selected tinsmithry materials generally declined during the month, while higher prices were noted in wire nails and steel bars during the period. The rest of the construction materials generally remained stable this month,” the PSA said. The CMRPI is a variant of the General Retail Price Index (GRPI), which measures the changes in the prices used by retailers to sell their goods to consumers and end-users relative to a base year. The market basket of the CMRPI is composed of 102 commodities and classified into seven major groups —carpentry, electrical, masonry, painting and related compounds, plumbing, tinsmithry and miscellaneous materials. While the GRPI is computed monthly and comes out 36 days after the reference month, the CMRPI is available 15 days after the reference month.
House Committee on Agriculture shall no longer joint-head the Acef Execom. In fact, they are yanked out of that body,” he said. “There is moral hazard in leading the body which you ought to oversee. Members of Congress are not supposed to serve as loan-approval officers in a purely Executive body,” Recto added. There is a provision in the bill designating the Land Bank of the Philippines as the one that shall manage the credit facility out of the funds, Recto said. As to the Commission on Higher Education head, his or her involvement can be justified by the fact that Acef is also being tapped to finance the studies of students taking up agriculture courses, Recto said. In hindsight, Recto said the scholarship component of Acef was one of its few bright spots. Loans for production capital may have been malversed but, by and large, tuition to train human capital was not.
CHRISTMAS LANTERNS
Colorful Christmas lanterns of various sizes are now being sold on Edsa in Quezon City. The Philippines is known for having the longest Christmas holiday season in the world, as Filipinos celebrate the birth of Jesus Christ as early as September. NONOY LACZA
DOE may defer auction of Mindanao coal plant By Lenie Lectura
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HE Department of Energy (DOE) has proposed anew to hold off the November auction for the selection and appointment of the Independent Power-Producer Administrator (IPPA) for the bulk energy of the 200-megawatt (MW) Mindanao Coal-Fired Thermal Power Plant (Mindanao Coal). DOE Officer in Charge Zenaida Monsada said this came up following the power situation in Mindanao, where water levels continue to drop at the Agus and Pulangi hydroelectric complexes due to a prolonged El Niño phenomenon. “For the sake of the people in Mindanao. If we privatize it now the tendency is there would be high power rates because there is a shortage in capacity now,” she said after the Senate budget hearing last Thursday. Taking the side of former Energy Secretary Carlos Jericho L. Petilla, Monsada explained that an early auction could cause price shocks. Petilla had explained that, while there is still a power supply shortage in Mindanao, the IPPA’s winning bidder could dictate electricity rates, which, in turn, could translate to higher electricity rates for the consumers. “There’s a shortage in Mindanao, so if there’s a shortage and you privatize that, cooperatives will get that for any price. So what I am saying is to hold off the privatization until such time that there are at least
two plants that are running,” Petilla had said, adding that the coal power plants of San Miguel Corp., Therma South Inc., and from the Alsons group are expected to come on line next year. Petilla’s concern was taken into consideration by the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to privatize the assets of the National Power Corp. Later on, the DOE and PSALM arrived at a mutual understanding to proceed with the privatization this year albeit inserting a three-year lock-in period in the power rates. During the lock-in period, the winning bidder would have no choice but to adopt the existing power rate sold by current plant operator, Steag State Power Inc. (SPI). In this way, electricity rates will not go up because the rates that will be used are the rates currently imposed based on the contract with Steag. Thereafter, PSALM scheduled the auction on November 25. But Monsada said last week that it is better off not to bid out yet the IPPA contract of the Mindanao coal plant. “So, the direction now is that it would be best if the privatization would take place when supply is stable. So probably by next year,” Monsada said when asked for a new timetable for the auction. However, PSALM, which will conduct the bidding, has yet to decide on this. PSALM President Lourdes Alzona said the PSALM Board would still have to de-
liberate on this. “We are still waiting for the DOE data on Mindanao power supply and rate assumptions. After that, we will take it up with the Board,” she said, adding that the Board would likely meet in the first week of October. The DOE is a member of the PSALM Board, which is chaired by Finance Secretary Cesar V. Purisima. Other board members include the secretaries of the Department of Budget and Management, the Department of Justice, and the Department of Trade and Industry. “The DOE is only one in the board. Congress is also insisting on a deferment until supply is stable,” Monsada said. Located in Misamis Oriental, the Mindanao Coal plant was constructed in 2006 for a 25-year Power Purchase Agreement under a build-operate-transfer scheme that ends in 2031 with Steag SPI. The power plant, which supplies about a fifth of Mindanao’s power requirements, is 51-percent owned by Steag; 34 percent, Aboitiz Power; and 15 percent, La Filipina. PSALM earlier met with the 12 prospective bidders for the Mindanao Coal, namely; Conal Holdings Corp.; FDC Davao del Norte Power Corp.; FirstGen Northern Power Corp.; GDF Suez Energy Philippines Inc.; Masinloc Power Partners Co. Ltd.; Meralco Powergen Corp.; Nexif Pte Ltd.; SMC Global Power Holdings Corp.; SPC Power Corp.; Team (Philippines) Energy Corp.; Therma Southern Mindanao Inc. (TSMI); and Vivant Energy Corp.
xporters, importers, and other industry players will find all the trade information they need right at their fingertips with the planned launch in October of the Philippine National Trade Repository (PNTR). The Bureau of Import Services said it is spearheading the creation of the facility that will be the main repository of trade data intended to help enterprises conduct business with more ease and efficiency. “The PNTR is simply a Web-based portal [that will] become the single source of accurate, up-to-date, and comprehensive information relating to trade,” said Sherwin Prose Castañeda, assistant director at the BIS, an attached agency of the Department of Trade and Industry. “If you want to know about regulations on imports, exports, documentary requirements of trade and regulatory government agencies, you will find it in the Philippine National Trade Repository,” he added. Castañeda, who spoke at a recent briefing on raising the competitiveness of small- and medium-scale enterprises (SMEs) in global value chains, said the program will benefit SMEs by promoting transparency and ease of doing business. “We believe that if the information is readily available, especially to SMEs, we can reduce costs because we have easy access to information and so doing business becomes easy for us,” he said. Castañeda said the PNTR is “a Philippine obligation,” much like the National Single Window (NSW), under the Asean Trade in Goods Agreement (Atiga) that requires the establishment of the Asean Trade Repository linking all the NTRs of member-states. The PNTR is also the government’s response to similar commitments under the recent World Trade Organization’s trade facilitation agreement, Philippines-United States free-trade agreement and the upcoming AsiaPacific Economic Cooperation trade repository. “In effect, we launch this by next month, this will be our compliance to four international trade agreements,” Castañeda said. “The portal is not yet finished. We intend to launch it October 28, 2015,” he added. Castañeda said that unlike the NSW which “provides an access for you to do transactions with the government,” the NTR is purely about access to trade information without any means to do online business. As an example, Castañeda said an importer can go to the repository to check if a certain commodity is a regulated good, which regulatory bodies oversee such products, documentary requirements, and timeframe and fees for the release of the import permit. All NTRs, including the Philippines, should have nine key elements under the Atiga, he said. The first threetariff nomenclature, Most Favored Nation Tariffs/preferential tariffs, and rules of origin are to be linked to the Enhanced Philippine Tariff Finder launched by the Philippine Tariff Commission. The rest are nontariff measures, national trade and Customs laws and rules, procedures and documentary requirements, administrative rulings, best practices in trade facilitation, and list of authorized economic operators. The official pointed out that national trade and Customs laws and rules, and procedures and documentary requirements are two of the most important elements for SMEs. Castañeda said the PNTR also went beyond the required nine to include information on accreditation requirements and procedures for importers and exporters, as well as enquiry points for agencies. There will also be news updates especially on regulatory requirements and revisions.
Tourism
A6 Monday, September 28, 2015 • Editor: Carla Mortel-Baricaua
THROUGH THE
INTRAMUROS Golf Club
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S M. G L
T the concierge counter of a hotel, two foreigners were talking to each other. Halfway through their conversation, one of them blurted out: “There is nothing to see in Manila!”
PRACTICING at the track
MANILA Cathedral
Hearing that, how could that possibly be? He must have been mistaken. If he really knows where to look, there are numerous treasures waiting to be explored within the city’s nooks and crannies. Take, for instance, the walled city of Intramuros. Built during the Spanish regime in 1571, the 64-hectare stone citadel is a metaphor for the country’s capital city itself. Its stone walls echo the 400-year colorful history of Manila. Its pavements testify to the rich cultural heritage that has been preserved through the years.
Inside the walls
EXPLORING Intramuros is a walking tour. Take time to visit the Intramuros Visitors’ Center at the Baluartillo de San Francisco in Fort Santiago. Pick up some maps and brochures as guides around the walled city. But since you
are already at Fort Santiago, you might want to begin your historical tour here. A popular tourist destination in Manila, Fort Santiago was originally built by Spanish conquistadors as a replacement to the destroyed fortress belonging to the last datu of Manila. Throughout history, the fort has served as a fortress against the Chinese pirates, a prison for the political prisoners during the Spanish period and a Japanese torture chamber during World War II. But the fort is best known as the place where the Philippine national hero, Dr. Jose Rizal, was imprisoned before his execution in 1896. Inside the fort is the Rizal Shrine, a museum housing Rizal’s memorabilias. Embedded on its pavements are his footsteps, representing his final walk from his cell to the location of the actual execution, in Bagumbayan.
From the main gate, walk toward General Luna Street, passing by Plaza Moriones and Palacio del Gobernador, and take a look inside the Manila Cathedral. The ecclesiastical seat of the Archdiocese of Manila, the cathedral is one of the two notable remaining churches built inside the walled city; the other being the San Agustin Church. Other churches built during the Spanish times were the San Nicolas de Tolentino Church, the San Francisco Church, the Third Venerable Order Church, the Santo Domingo Church, the Lourdes Church and the San Ignacio Church; gaining for the city the name “City of Churches.” The present-day structure of the cathedral is the sixth to occupy the site. The first one was built in 1581 but was razed two years after it was constructed. The present church was completed in 1958. Inside the cathedral are the crypts that serve as the final resting place of deceased Manila archbishops, including Jaime Cardinal Sin, one of the
Siargao rebrands to multitou B M T. C Mindanao Bureau Chief
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HIS northeastern Mindanao resort island is rebranding itself from being the world’s premier surfing destination to a slew of several tourism attractions, mostly on adventure and family fun, in its bid to entice year-round visit. Only last year that the island snatched the prime Civil Aviation Authority of the Philippines approval to upgrade its 1.2-kilometer Class 2 principal, or minor domestic, airport, to international status, with immediate plan to add 1 more kilometer to its strip and expanding the runway wide by another 300 meters. Mayor Alfredo Matugas Coro II of Del Carmen town said rebranding already propped up plans from all the nine municipalities of Siargao Island to prime up their attractions and product offering. His town, for example, is crafting up production and marketing of its mangoes while developing pools
MAYOR Alfredo Matugas Coro II
and beaches for visitors with family members in town. “There are caving, diving and kayaking activities in the other beaches,” he told reporters at the side of the climatechange seminar here organized by the
Department of Agriculture and the Philippine Agricultural Journalists Inc. What was quite successful so far was the emergence of being one of the world’s game fishing destination, held on the end of March toward May, he said.
m&Entertainment
tourism@businessmirror.com.ph • Monday, September 28, 2015 A7
E WALLED CITY
NARROW passage
THE path to Intramuros
Other interesting places nearby include the Puerta de Santa Lucia, one of the several gates passing through the walls. Constructed in 1603, the gate leads to Malecon Drive. There is also Casa Manila, a reconstruction of the Spanish colonial house, where guests can take a glimpse of how Filipinos lived during the Spanish time.
New way to explore Intramuros
1986 Edsa Revolution movers that ousted President Ferdinand Marcos. Walk further down and one would see the other remaining church built during the Spanish period. First constructed in 1571, San Agustin Church has been destroyed and rebuilt several times before the present-day structure was completed in 1604, with an earthquake-proof design. The church has 14 side chapels, hand-carved wooden pews and the 18th-century pipe organ, and most people could not help but marvel at its beautiful trompe l’oeil ceiling. Beside the church is a museum housing Spanish vestments, religious artworks and pieces of furniture. Designated as a United Nations Educational, Scientific and Cultural Organization World Heritage Site in 1993, the church also has a crypt. History has it that Spanish and American commanders had discussed Manila’s terms of surrender in its vestry. Also, the Japanese invaders had killed about 140 people on the church premises during World War II.
LEISURE TIME AWAY FROM THE CITY LIFE
IF you have strolled around the walled city, one could not help but notice the green patches of land that are part of the Club Intramuros Golf Course. In 1898, when the Americans took over from the Spaniards, the moat around Intramuros was drained and reclaimed. It was later covered with grass, spruced up with sand pits and ponds, and was turned into a golf course. Considered the oldest golf course in the country, Intramuros Golf Club has an estimated 4,000-yard greensward, complementing the centuries-old walls. Simply Moving Philippines Inc. (SMPI) has partnered with the Department of Tourism and the Intramuros Administration to create a unique tour to see the different sights within and outside the walled city of Manila using a Segway, a self-balancing personal transportation vehicle. “Most golfers come here with companions, or with their family. While the golf course is not that expansive, it still takes time to finish the 18 holes. This tour is the best way to keep the companions occupied while waiting for the golfers to finish their game, and give them something to look forward to when visiting the golf club,” said SMPI COO George Apacible, who shared that the Segway tour was first introduced in the Philippines in Boracay in 2012. But it has been already making the glide at the world’s major tourist destinations, such as Barcelona, Washington, D.C., Paris and Singapore.
A glide through history
ONBOARD our Segway, our tour guide led us to our first stop: Reducto de San
Francisco Javier. When the Spanish conquistadores made some renovations in Fort Santiago, they added this tunnel and ravelin to serve as protection for some parts of the riverside and seashore. On the platforms at the top, they placed cannons; while gun powders and ammunition were stored in the chambers below. Like most parts of Intramuros, this fortification had been badly damaged during the war. After its renovation in the 1980s, it was converted into a shrine for the Our Lady of Guadalupe. Gliding through the fairways, we reached the beautiful greenery that serves as the verdant stage for Manila’s historical landmarks, such as the Palacio del Gobernador—an eight-story office building that was built as the official residence of the Spanish gobernador-general. We could also see the Manila Cathedral from the golf course. We also stopped by the monument of Miguel Hidalgo, a Mexican liberator. Opposite the small park was a narrow rough road leading to one of the entrances to Intramuros. Next, we came by the Postigo del Palacio, where Rizal was taken here en route to Bagumbayan (currently known as Luneta Park), the place of his execution, on December 30, 1896. Riding the Segway, we followed the long circuit of massive stone walls and fortifications. From our vantage point, we saw the irregular outline of the defensive walls. History has it that the walls follow the contours of Manila Bay and the curvature of the Pasig River. After 30 minutes of maneuvering the personal transport vehicle, we went back to the starting point. Sometimes, one need not travel for hours to find and create a new experience. Even in the heart of Manila, one can find a destination that can drown the madness of the city life. As for the two foreign tourists, with the right perspective, they hopefully would find beauty and poetry beyond the grittiness and chaos that is Manila.
WATER slides at the swimming area
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L Puerto Marina Beach Resort and Vacation Club is the place to relax, have fun and taste delicious food. Located at Maniboc, Lingayen, Pangasinan, its surroundings are filled with lush trees and plants. Another plus for the resort is that it is near the beach, perfect for newlywed couples enjoying their honeymoon, or a holiday outing with family or friends. At the resort, visitors can enjoy ac-
“We cannot attract more flights because airline companies are buying the bigger planes,” he said. By next year, Coro said, the Department of Public Works and Highways would have completed the concreting of the 162-kilometer circumferential road. “More than improving access, we are also improving governance and services to locales and tourists, and health services improved on the area of trauma therapy to respond to accidents in surfing and other adventure sports,” he said. He added that peace and order “is not a problem here, because no one is interested to come here to commit crime; they won’t just cross the 60-km stretch of water [from mainland Surigao del Norte] or the Pacific Ocean to commit something bad.” “The prime motive to improve governance and increase tourism is to improve the livelihood of our people,” he said, saying, “We have to provide more opportunities other than fishing, that only earn them an average of P2,000 a month.”
a flat-screen TV, hot and cold shower, full kitchen and living room. To keep the family rooms cozy and cool, new Daikin Split Type air-conditioners were installed by Diamzon and Gopez Refrigeration & Airconditioning Industries Co. As an ideal place to get away from the busy city life, visitors can expect a relaxing weekend or vacation with their loved ones at the El Puerto Marina Beach Resort and Vacation Club.
DILG, CANADA HOST TOURISM INVESTMENT FORUM
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HE Department of the Interior and Local Government (DILG) and the government of Canada, through the Local Governance Support Program for Local Economic Development (LGSP-LED), recently hosted a Tourism Investment Forum at the SMX Convention Center. With the theme “Growing Local Economies through Connecting Tourism Communities and Businesses,” the event convened local chief executives and investment promotion officers from partner business-friendly provinces and cities, as well as business groups, associations and entrepreneurs interested in the tourism growth opportunities in the country. The Tourism Investment Forum, which was held as part of the Galing Pook Foundation’s Governance Fair 2015, aims to unite local government units (LGUs) and business leaders
urism destination “These are more of an adventure type, but the construction of pools and development of beaches at the other side of the island would be intended for the families of surfers,” he said. The island’s natural landscape and natural shield from adverse changes in the climate is its natural attraction though, he said. Siargao Island’s 120,000 hectares of mangrove is the country’s largest National Integrated Protected Areas System site. The rebranding would hope to spike further the 100,000 annual visits by tourists, which started with only 38,000 in 2010. “We have to spread around the economic benefits of tourism to the more than 120,000 residents of the island,” he added. In 2010 poverty index was pegged at 67 percent. The approval to upgrade the Sayak Airport, more popularly known as Siargao airport, would also be intended to persuade airline companies to use their bigger aircraft. The airport could accommodate only the turboprop and Bombardier aircraft.
tivities, such as beach volleyball, billiards, kayaking and many more. The staff are very friendly and efficient, and always available to assist customers with any concern. For accommodations, they offer rooms that recreate the feel of traditional Filipino homes. Some rooms look like cottages or nipa huts, and make for a very relaxing and convenient stay. Each of their family rooms are equipped with
MANGROVE trees line up the coasts along Del Carmen town in Siargao Island
with the common goal of developing real poverty solutions by advancing local economic development. Here, participants were able to exhibit tourism growth opportunities to potential investors, developers and lenders, as well as showcase what it has contributed to the country’s overall tourism development. It also featured discussions on best practices and mechanisms essential in creating the kind of local business environment that will transform the Philippine local tourism industry into a promising investment destination. The LGSP-LED is an eight-year joint program of the Canadian and the Philippine governments with a goal of promoting efficient, responsive, transparent and accountable governance at all levels. Its purpose is to reduce poverty by strengthening local governance and supporting sustainable lo-
cal economic development (LED). Since 2008, LGSP-LED has assisted 17 provinces, 17 cities and hundreds of municipalities in the country in streamlining their local business permits and licensing systems, updating their local incentive investment and revenue code, creating local economic and investment promotion offices, and strengthening their engagement with the private sector for investment promotion and tourism product development and destination marketing. It has completed local economic development initiatives in nine project sites across the Philippines that aim to attract investments, increase tourism arrivals, and create jobs for 11 provinces, eight cities and 60 municipalities. LGSP-LED LGUs attracted almost P6 billion in investments and created over 2,200 new jobs for their communities.
OurTime BusinessMirror
A8 Monday, September 28, 2015 • Editor: Efleda P. Campos
news@businessmirror.com.ph
Baguio City foundation plants trees for future generations
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AGUIO CITY—Members of the Blessed Association of Retired Persons (BARP) Foundation Inc. planted more than 100 pine-tree seedlings at Camp 8 Watershed and 200 fruit-bearing trees on their own initiative. Ferdie Balanag, media relations officer of the foundation, on Wednesday said this was one of the foundation’s activities aimed to ensure that the future and younger generation will still have a green environment to inherit. Balanag added the tree-planting activity called “Green Life” is one of the foundation’s ways of showing the love for the environment.
“The retirees feel that it is their responsibility to protect the environment for the future generations to have refreshing shades and green surroundings,” Balanag said. As a member, Balanag said, “we are committed to continue our program for our environment.” “We help enhance the country’s forest stock to absorb carbon diox-
ide which is largely blamed for global warming,” he said. Balanag said the activity is also BARP’s contribution to the National Greening Program of the government, which aims to promote environmental stability, biodiversity conservation, enhance climatechange mitigation and reduce poverty by providing alternative livelihood activities. BARP has been planting trees for the past several years and the last time they went around to inspect, the fruit trees like guava, avocado and lemon were ready for harvesting. BARP is the largest organization of senior citizens and retired persons in Northern Luzon with a total membership of over 13,000 and still growing. PNA
SHARING ICE CREAM WITH GRANDMA A young girl shares her ice cream with her grandmother in the middle of the road in Baguio City. MAU VICTA
China’s ponzi-dodging pensioners chase high returns, free lunch PhilHealth to members: Avoid hassles; make sure premium payment is updated
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ITTLE known small investment firms have been popping up all over China, luring pensioners’ savings by promising annual returns of more than 10 percent, and sometimes as high 60 percent, to fund cash-thirsty projects unable to get bank loans. Distributing fliers outside supermarkets and drawing on wordof-mouth, the private firms—part of China’s unregulated network of shadow financing—typically lure retirees with the offer of free lunch. A recent feast of radish soup, spare ribs, red-cooked pork, fried vegetables and a yogurt cup at a downtown Beijing restaurant drew about 100 mostly elderly people to hear a passionate lecture on the importance of investing. Attendees were treated to a magic show in which a magician chopped off the hand of his assistant in a bloody flourish, a bamboo flute concert, a whirling acrobat, and lucky drawings—as well as the promise of 12-percent annual returns to lend their money to a real-estate project in Chengdu. “The project sounds not bad, just the return is a bit low,” said Fan, a blasé 62-year-old attendee who only gave her surname. She does this all the time and normally expects higher rates, no less than 15 percent on average, she said. That’s low compared with other investments being touted to Beijing’s elderly. A typical supermarket flier will list several offers with returns in the low double-digits. When potential investors phone up, they’re offered higher rates for even riskier products. A recent one, to fund the acquisition of a small oil-pipe company in Jilin province, promised 5 percent a month, or 60 percent annually. The risk that some will turn out to be Ponzi schemes and never pay back the principal propels the wisest of the elderly investors to be wary. They advise each other to attend only investment pitches with lower returns, eat the free lunch on offer and take their money out relatively quickly before any signs of repayment difficulties emerge. Another lunch attendee who only gave her surname as Wang said her self-imposed cutoff for investments is a 20-percent annual return, and that she makes site trips to see projects herself whenever possible. She knows two people who put money into a product offering more than 30 percent last year, only to see their investments sour after receiving just two monthly payments, she said. “My experience is, don’t stick with any company for too long,” Wang said, as the emcee loudly read out names of people who he proclaimed had just collectively pledged more than 2 million yuan (about $313,800) to fund the Chengdu project.
While it’s possible for experienced investors to make money from investments that turn out to be Ponzi schemes, the risk is like “pulling chestnuts out of the fire,” said Liao Qiang, a Beijing-based analyst for Standard & Poor’s. China’s 147 million pensioners are plowing more of their money into investments other than deposits. Net inflows into open-end mutual funds jumped 32-fold from a year earlier to 1 trillion yuan last year, according to a June report from the Asset Management Association of China. While investors older than 60 accounted for only 9 percent of all such accounts, their average investment of 42,800 yuan as of December 31 was the highest among all age groups, compared to 8,100 yuan among people younger than 30, according to the report. As China’s massive market selloff leaves many Chinese jittery about stocks, little-known investment companies have proliferated, prompting authorities to try to crack down with little result. China’s lowering of interest rates paid by banks four times this year, as well as a tightening of lending to riskier projects, is also fueling growth. “This informal lending segment of the shadow banking system is one of the least transparent and regulated, and is likely to be among the most risky for investors,” said Stephen Schwartz, a Hong Kong-based senior vice president at Moody’s Investors Service. “Based on anecdotal information, we understand that this activity has become more widespread in the past year or two.”
Demand for loans is unrequited in a country where the shadow banking system, which includes all lending outside banks, has already grown to an estimated 41 trillion yuan at the end of last year, equivalent to 65 percent of gross domestic product, according to Moody’s. Small businesses and unrated property developers are likely “encountering tighter financing conditions” as increased government scrutiny slows the growth of core channels such as trust loans, the rating firm said in a July report. While many of the investment companies are registered asset managers with offices in high-rise downtown buildings, they risk violating a government rule banning any marketing of private products to the general public. Under current rules, private investment products can only be sold to qualified investors that have at least 500,000 yuan average annual income in the past three years, no promise on repayment of principal or yield is allowed, and investment in a single product shouldn’t be lower than 1 million yuan. Often the qualification requirements are skipped, high returns committed, and investments of as small as 50,000 yuan welcomed, according to investors interviewed by Bloomberg News. While shadow financing keeps growing, the government has rarely taken the initiative to “burst the bubble,” and any efforts tend to be just after-risk remedies unable to prevent losses, Liao said. “I feel that regulatory and lawenforcement authorities are some-
what out of step with the changes in the financial market,” Liao said. “It’s quite a pity from the perspective of both financial stability and investor protection.” The government’s pursuit of illegal fund-raising cases in Beijing more than tripled to 89 in 2014 from the previous year, with investors affected nationwide jumping sixfold to 21,000 and investments involved skyrocketing 57 times to 17.3 billion yuan, according to official data from city authorities. Such cases continued to surge 65 percent in the first five months of this year, the government said. That prompted the local government in May to launch a four- month crackdown on illegal fundraising, saying in an April 30 statement that such cases have been frequently found in areas of private investment funds, online lending and wealth management, causing “huge losses” and “serious impact on social order.” Among the cases was a private investment company known as Cheng Ji Da Yi, a familiar name among investors after its financing director disappeared with client money late last year, according to police statements then. The risks are hardly enough to stop investors from seeking high returns that traditional channels can’t offer. Five interest rate cuts since November reduced the appeal of banks’ wealthmanagement products, and returns available through peer-to-peer online lending, which fell to 13 percent in August, pale in the face of private products. Bloomberg News
VETERANS’ PARADE War veterans living in the city of Baguio proudly walk the streets along the central business district during a parade celebrating the city’s liberation from Japanese forces during World War II. MAU VICTA
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HE Philippine Health Insurance Corp. (PhilHealth) has reminded members to maintain an updated payment of premiums or contributions in order to avoid hassles in times of hospitalization of a member or any of his or her dependents. “It is important that members like those in the formal and informal economy make the specified payments of contributions to ensure entitlement to PhilHealth benefits, so that in times of sickness or hospitalization of the member or dependents, there would be no problem in availing of benefits,” Dr. Israel Francis A. Pargas, officer in charge vice president for PhilHealth Corporate Group, said on Wednesday. Pargas said employees in the government and private sectors, including kasambahay and family drivers, as well as self-earning individuals, must have paid at least three months’ premium contributions within the immediate six-month period prior to the first day of confinement for them to avail themselves of the benefits from PhilHealth. The policy is specified under PhilHealth Circular 32, Series of 2014, which Pargas cited as a flexible means for members to pay premium contributions before the first day of hospitalization. The PhilHealth official noted that such scheme is in a way flexible and lighter than the previous policy wherein a member was required to have made payment in the previous succeeding months prior to confinement. “Before, if members or dependents got hospitalized, they were required to have made payments of six months backward prior to confinement. But with the existing scheme, all they have to ensure is there should be a payment of three months [not necessarily in order] within a six-month period prior to confinement,” he said. The payment is not necessarily in order as long as there is a payment of a total of three months during the six-month period. To illustrate, if a member is confined, for example, on September 15, he or she should have made three payments of premiums within the six month-period backward (March to August). Pargas said that for indigents, sponsored members, senior citizens and overseas Filipino workers, the availment period is different. “On the first day [or Day 1] of the effectivity/validity of their coverage, they can immediately avail of the benefits, in case, they will need it,” he said. Indigent members are those iden-
tified by the Department of Social Welfare and Development through the National Household Targetting System for Poverty Reduction who have “no visible means of income,” or whose income is not enough to sustain a family. Sponsored members are persons whose contributions are being paid for by government agencies, private entities, or another individual. Formal economy members are those who have contracts or fixed term of employment such as government workers and private sectors, owners of micro, small, medium and large enterprises, household helpers, family drivers. Informal economy members are migrant workers, self-earning individuals, Filipinos with dual citizenship, naturalized Filipino citizens and citizens of other countries residing/working in the Philippines. Lifetime members are those who have reached the age of retirement and have made at least 120 contributions. Senior citizens are elderly members who are 60 years old and above and who are not covered under any of the member categories of the National Health Insurance Program by virtue of Republic Act 10645, or the Mandatory PhilHealth Coverage for all Senior Citizens. The contribution for PhilHealth member totals P2,400 for one year equivalent to P200 a month, or an average of P6.60 a day. That amount gives the member and his/her dependents security or relief in high costs of hospitalization through the health coverage benefits that can be availed once they are confined in hospital. These health coverage comes in the form of health benefit packages. The health benefit packages range from inpatient benefits, catastrophic, or Z-benefits, outpatient benefits, primary care benefits, or TSeKaP, (initially available to indigents/sponsored and Department of Education teaching and nonteaching personnel) and other benefits. In the process, the PhilHealth pays the hospitals/health providers for the package of benefits availed and deducted from the total bills of the member patient/dependent. The indigents and senior citizens (not gainfully employed) P hilHealth contr ib ut ions as members are being paid by the national government through the “sin” tax revenues. They also enjoy the no balance billing policy when admitted in government hospital facilities. PNA
CHINA EASTERN AIRLINES CORPORATION LIMITED General Conditions of International Carriage for Passenger and Baggage President’s Statement The General Conditions of International Carriage for Passenger and Baggage of China Eastern Airlines Corporation Limited is a contract of air carriage entered into by and between CEAIR and a Passenger carried by CEAIR, specifying the rights and obligations of both parties and any liabilities assumed by either party arising from breach of the contract, and shall be binding upon CEAIR and the Passenger. CEAIR will offer all or part of the text of these Conditions at its ticket offices and on its booking websites, and earnestly urge Passengers to read these Conditions carefully and inquire about the meanings of the relevant contents before booking tickets. Purchase of tickets shall be deemed as acceptance by Passengers of these Conditions and agreement by Passengers to perform the contract of carriage pursuant to these Conditions. President of China Eastern Airlines Corporation Limited: Table of Content Article 1 Definitions ........................................................................................................................... 3 Article 2 Scope of Application .......................................................................................................... 9 Article 3 Tickets ................................................................................................................................. 10 Article 4 Fares, Taxes and Charges ................................................................................................ 15 Article 5 Reservations and Purchase of Tickets ............................................................................. 16 Article 6 Overbooking ....................................................................................................................... 21 Article 7 Check-in and Boarding ...................................................................................................... 21 Article 8 Baggage .............................................................................................................................. 24 Article 9 Flight Schedules, Delays and Cancellations .................................................................... 37 Article 10 Refusal to Transport and Limitation of Carriage .............................................................. 40 Article 11 Refunds .............................................................................................................................. 42 Article 12 Changes to Tickets ............................................................................................................ 47 Article 13 Passengers Services ........................................................................................................ 48 Article 14 Services Provided by Third Parties .................................................................................. 49 Article 15 Conduct Aboard Aircraft .................................................................................................... 50 Article 16 Administrative Formalities ................................................................................................. 51 Article 17 Successive Carriers .......................................................................................................... 52 Article 18 Liability for Damage ........................................................................................................... 53 Article 19 Claims and Actions ............................................................................................................ 57 Article 20 Effectiveness and Modification ......................................................................................... 59 Article 1 Definitions As used in these General Conditions of Carriage for International Passengers and Baggage, except as otherwise required or expressly defined herein, the following terms shall have the meanings ascribed below: 1.1 “Convention” means one kind of treaties which shall be concluded by and among three or more countries in respect of certain political or specific issues. As used herein, the term means the treaties on International Air Transport concluded by the People’s Republic of China, including but not limited to: 1.1.1 Convention for the Unification of Certain Rules for International Carriage by Air, signed at Montreal on May 28, 1999 (abbr. the Montreal Convention); 1.1.2 Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on October 12, 1929 (abbr. the Warsaw Convention); 1.1.3 Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on October 12, 1929, signed at The Hague on September 28, 1955 (abbr. The Hague Protocol) 1.1.4 Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo, Japan on September 14, 1963 (abbr. the Tokyo Convention) 1.2 “International Air Transport” means carriage in which, according to the contract of carriage, the place of departure, the place of destination or any Agreed Stopping Place, whether or not there is a break in the transportation or a transfer, is not situated in the People’s Republic of China. 1.3 “Regional Route Air Transport” means carriage between or among certain places within the People’s Republic of China, including Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan. 1.4 “CEAIR” means the abbreviation of China Eastern Airlines Corporation Limited, with the English Code: MU. 1.5 “Carrier” means the air carrier issuing the ticket and all air carriers that carry or undertake to carry the Passenger and his/her Baggage thereunder. 1.6 “Issuing Carrier” means the airline showing its accounting code on flight coupons or value coupons of Electronic Tickets. The Issuing Carrier shall be the controlling and authorized entity of the Electronic Ticket sales. 1.7 “Marketing Carrier” means the airline showing its airline code on flight coupons or value coupons of Electronic Tickets. In case of a bilateral agreement (e.g. an airline code sharing agreement), the Marketing Carrier may not be the Operating Carrier. 1.8 “Operating Carrier” means the airline performing all or part of a contract of carriage. 1.9 “Regulation of CEAIR” means the provisions, other than these Conditions, governing carriage of Passengers and their Baggage published by CEAIR with immediate effect as of the issuance of Tickets, including the valid and applicable fares. 1.10 “CEAIR Passenger Sales Agent” means an enterprise authorized by and on behalf of CEAIR to sell the products of passenger carriage by air within the scope of authority. 1.11 “CEAIR Ground Services Agent” means an enterprise authorized by and on behalf of CEAIR to provide ground agent services of Passenger and Baggage carriage by air within the scope of authority. 1.12 “Passenger” means any person, except members of the crew, carried or to be carried in an aircraft with the consent of CEAIR. 1.13 “Child Passenger” means a Passenger who has reached his/her second birthday but not his/her 12th birthday as of the date of commencement of carriage by air. 1.14 “Infant Passenger” means a Passenger who has reached his/her 14 Days of age but not his/her second birthday as of the date of commencement of carriage by air. 1.15 “Group Passenger” means a Passenger in a group of 10 or more persons (or the minimum number of Passengers required in certain product), having the same itinerary, boarding dates and flights with the other Passengers in the group and paying the same Fares for Passengers in the group. 1.16 “Tariff” means fares, charges and/or any other applicable conditions published by CEAIR. 1.17 “Normal Fare” means the highest fare for adults published by CEAIR in local currency for a First Class, Business Class and Economy Class service. 1.18 “Special Fare” means the fare lower than a Normal Fare and subject to service limitations. 1.19 “Passenger Reservation Document” means the business document used for reservation and issuance of a Ticket by CEAIR or a CEAIR Passenger Sales Agent, which must be filled in by a Passenger before purchasing a Ticket. 1.20 “Reservation” means a reservation made for the seat and cabin class booked by a Passenger or the weight and size of Baggage. 1.21 “Valid Identification Certificates” means the documents produced by a Passenger when purchasing a Ticket and checking-in so as to prove his/her identification as prescribed by competent governmental authorities (e.g. a valid (visa) passport, travel document of a Hong Kong, Macau or Taiwan resident, seaman's book, etc.). 1.22 “Ticket” means the record of carriage sold or recognized by and vesting the carriage right with CEAIR or a CEAIR Passenger Sales Agent, including paper Tickets and Electronic Tickets. 1.23 “Interline Ticket” means a Ticket on the services of two or more flights. 1.24 “Conjunction Ticket” means a Ticket issued to a Passenger concurrently in conjunction with another Ticket and which together constitute a single contract of carriage. 1.25 “Fixed Ticket” means a Ticket with the flight and boarding date fixed and the seat confirmed. 1.26 “Open Ticket” means a Ticket with the flight and boarding date unfixed and the seat unconfirmed. 1.27 “Flight Coupon” means a portion of a paper Ticket that indicates two travel points between which the coupon is “good for carriage.” 1.28 “Passenger Coupon” means that portion of a paper Ticket marked with “Passenger Coupon”, which shall be retained by the Passenger at all times. 1.29 “Electronic Ticket” means a Ticket in electronic data sold by CEAIR or a CEAIR Passenger Sales Agent and is the electronic substitute for a paper Ticket. 1.30 “Air Services Electronic Ticket Itinerary” (hereinafter referred to as the “Itinerary”) means the document produced by CEAIR or a CEAIR Passenger Sales Agent to a Passenger as a payment voucher for purchase of an Electronic Ticket and a reminder of the Passenger’s itinerary. 1.31 “Day” means a calendar day rather than a working day, including all seven days of a week. The issuance day of a Ticket or the commencement day of a carriage shall not be counted in the case of determining duration of validity of a Ticket, and that the issuance day of notice shall not be counted in the case of notifying a Passenger. 1.32 “No-show” means a Passenger’s failure to get on board due to his/her failure to check-in within the prescribed time limit or to comply with the requirements for travel documents. 1.33 “Missing Flight” means a Passenger’s failure to board on the designated flight after the check-in at the place of departure or during the stay at the stopping place. 1.34 “Wrong Plane” means a Passenger’s boarding on a wrong aircraft rather than the one indicated on the Ticket. 1.35 “Misconnection” means a Passenger’s failure, due to the delay or cancellation of flight, to catch the connecting flight in which he/she holds a confirmed seat so as to continue the journey. 1.36 “Overbooking” means a selling of seats in excess of the maximum seating capacity on the flight. 1.37 “Volunteer of Denied Boarding” means a Passenger who has been ready to board but is willing, upon CEAIR’s request, to relinquish his/her seat in exchange for compensation according to the Regulation of CEAIR. 1.38 “Refusal to Transport” means a situation in which CEAIR refuses to transport a Passenger and his/her Baggage due to security or other reasons. 1.39 “Code Share Flight” means a flight operated by a Carrier on which CEAIR uses its airline code through agreement, or a flight on which several airlines use their flight numbers respectively. 1.40 “Baggage” means such articles and other personal property of a Passenger as are necessary or appropriate for wear, use, comfort or convenience in connection with his/her trip, including both Checked Baggage and Unchecked Baggage of the Passenger. 1.41 “Checked Baggage” means Baggage of which CEAIR takes custody and carriage and for which CEAIR has issued a Baggage Check. 1.42 “Unchecked Baggage” means Baggage other than Checked Baggage attended by the Passenger. 1.43 “Free Baggage Allowance” means the baggage allowance of a Passenger’s Checked Baggage free of charge according to the Regulation of CEAIR. 1.44 “Baggage Check” means the portion of a Ticket which is related to the baggage carriage for a Passenger. 1.45 “Identification/Claim Baggage” means the document issued to a Passenger by CEAIR solely for identification of Checked Baggage. 1.46 “Assistive Device for Individual with a Disability Passenger” means any piece of equipment that assists a Passenger with a disability to cope with the effects of his or her disability. Such devices are intended to assist a Passenger with a disability to hear, see, communicate, maneuver, or perform other functions of daily life, and may include medical devices and medications. 1.47 “Check-in Closes Time” means the latest time for a Passenger to check in as prescribed by CEAIR. 1.48 “Departure Time” means the time after which Passengers have boarded on the flight, Baggage and cargo have been loaded and all cabin doors have been shut down. 1.49 “Force Majeure” means the unforeseeable, unavoidable and insurmountable objective circumstance, the consequence of which still cannot be shunned after all reasonable measures have been taken. 1.50 “Voluntary Refund” means a refund made in the event the Passenger fails to finish the journey according to the contract of carriage due to his/her own reasons. 1.51 “Involuntary Refund” means a refund made in the event the Passenger fails to finish the journey according to the contract of carriage because of early departure, delay or cancellation of flight, or change in itinerary, or inability to provide previously confirmed seat of CEAIR. 1.52 “Change Fees” means fees paid by a Passenger who voluntarily changes his/her flight or boarding date subject to applicable conditions of the original Ticket and these Conditions. 1.53 “Damage” means loss caused to CEAIR by death of or bodily injury to a Passenger on board the aircraft or during the course of getting on or getting off the flight; or loss or any other damage caused during which all or part of property is taken custody by CEAIR or any theft of the property; or loss caused to Unchecked Baggage attended by a Passenger due to CEAIR or its agent’s fault. 1.54 “Special Drawing Rights (SDRs)” mean a kind of reserve assets and unit of account defined by the International Monetary Fund (IMF), representing a claim to currency allocated by IMF to IMF member countries for which they may be exchanged. As a kind of unit of account rather than a currency, SDRs must be exchanged into a currency before use, and cannot be used directly for payments under trade or non-trade items. SDRs are supplementary to the ordinary drawing rights defined by IMF. 1.55 “Stopover” means a deliberate interruption of a journey by the Passenger at a point between the place of departure and the place of destination, which has been agreed to in advance by CEAIR. 1.56 “Agreed Stopping Place” means the place, except the place of departure and the place of destination, set forth in the Ticket or shown on CEAIR’s timetables as a scheduled stopping place on the Passenger’s route. 1.57 “Minimum Connecting Time” means the minimum time published by CEAIR for a Passenger to stay at the stopping airport to process formalities for interline carriage or transfer of flights. Article 2 Scope of Application 2.1 General Principles 2.1.1 Except for those specified in Articles 2.1.2, 2.2, 2.4 and 2.5, these Conditions apply to all International Air Transport and Regional Route Air Transport of Passengers and Baggage performed by CEAIR aircrafts for remuneration. 2.1.2 These Conditions also apply to carriage under gratuitous fares and Special Fares, unless otherwise prescribed for the carriage conditions, contracts and tickets of gratuitous fares and Special Fares. In case of any discrepancy, special conditions and Tariff rules shall prevail. 2.2 Chartered Aircrafts In the case of carriage provided by the CEAIR contract of chartered aircrafts, these Conditions only apply to the extent where they are covered in the contract of chartered aircrafts and the provisions on the ticket of chartered aircrafts. 2.3 Code Share In accordance with code share arrangements between CEAIR and other Carriers, these Conditions only apply to carriage of Code Share Flights operated by CEAIR. 2.4 Rules of Effectiveness The General Conditions of International Carriages for Passenger and Baggage of China Eastern Airlines Corporation Limited and the Tariff rules of CEAIR shall come into force upon the issuance of all the Tickets. If such issuance time has not been determined, these Conditions and Tariff rules of CEAIR shall come into force as of the commencement date of carriage indicated in the Passenger Coupon of the first Ticket (Electronic Ticket). 2.5 Overriding Law Under the circumstance that any provision hereunder is contrary to any applicable laws, administrative regulations, rules and orders of a nation, except for those inconsistent provisions, the validity of the remaining provisions hereunder shall not be affected. Article 3 Tickets 3.1 General Provisions 3.1.1 The Ticket constitutes prima facie evidence of the contract of carriage between CEAIR and the Passenger. 3.1.2 CEAIR or CEAIR Passenger Sales Agents shall fulfill the obligation to issue a Ticket to a Passenger only after the Passenger has paid the fare in full as required by CEAIR. 3.1.3 CEAIR will only provide carriage service to the Passenger named on the Ticket and may request the Passenger to produce his/her Valid Identification Certificates (see Article 1.21 herein). 3.1.4 The Ticket is non-assignable. 3.1.5 If a Passenger travelling on a Paper Ticket fails to produce a valid Ticket issued pursuant to the Regulation of CEAIR containing the Flight Coupon for the intended flight and all other unused Flight Coupons and Passenger Coupons, such Passenger has no right to request for boarding. A Passenger who produces an incomplete Ticket or a Ticket that has been changed by a person other than CEAIR or CEAIR Passenger Sales Agents also has no right to request for boarding. 3.1.6 A Passenger travelling on an Electronic Ticket shall produce his/her Valid Identification Certificates used for purchase of the Ticket. If the electronic Flight Coupon is displayed as valid, CEAIR will provide carriage; if the Electronic Ticket has been converted into a Paper Ticket, CEAIR will provide carriage to the Passenger only after the Passenger produces the valid and complete Paper Ticket. 3.1.7 The Flight Coupons of the Ticket shall be used in sequence as specified on the Ticket, starting from the place of departure. Failure to use the Flight Coupons in the aforesaid sequence will result in the refusal of CEAIR to provide carriage. 3.1.8 The flight segments and the class of service shall be indicated on each Flight Coupon and shall be accepted by CEAIR for carriage after the seat and the commencement date of the flight are confirmed. In the case of Flight Coupons with seats unconfirmed, CEAIR will make Reservations for the Passengers, upon their applications, subject to the applicable conditions and fares of the Tickets held by the Passengers and the availability of seat capacity on the flight. 3.1.9 The Passenger shall finish all the itineraries indicated on the Ticket within the duration of validity of the Ticket. 3.1.10 In the case of an international and regional Interline Ticket containing a domestic flight segment, the Flight Coupon of the domestic flight segment can be used directly without being converted to a domestic Ticket. 3.1.11 A Ticket shall be invalid in the event of any alteration made by any person other than CEAIR, CEAIR Passenger Sales Agents or CEAIR Ground Services Agents. 3.2 Duration of Validity of Tickets 3.2.1 A Ticket shall be valid for a one-year period, except for Special Fare Tickets, from the commencement date of the first carriage, or from the issuance date of the Ticket if the Ticket has not been used. 3.2.2 Duration of validity of Special Fare Tickets shall be subject to the applicable conditions of such Special Fare as prescribed by CEAIR. 3.2.3 Duration of validity of Tickets shall begin from the zero hour of the day immediately after the commencement of travel or issuance of a Ticket to the zero hour of the day immediately after expiry of the duration of validity. 3.3 Extension of Duration of Validity 3.3.1 If a Passenger fails to travel within the duration of validity of the Ticket due to any of the following reasons, the duration of validity of the Ticket shall be extended to a soonest date in which the seats of the same class as purchased by the Passenger are available in a CEAIR flight: 3.3.1.1 CEAIR cancels the flight on which a Passenger holds a confirmed seat; 3.3.1.2 CEAIR cancels an Agreed Stopping Place, which is the place of departure, place of destination or a Stopover point of a Passenger; 3.3.1.3 CEAIR fails to properly operate a flight according to schedule; 3.3.1.4 CEAIR causes a Passenger’s failure to catch a connecting flight; 3.3.1.5 CEAIR fails to provide a Passenger with the seat confirmed in advance. 3.3.2 If a Passenger, who has commenced his/her travel, fails to continue to travel within the duration of
validity of the Ticket by reason of illness, such Passenger shall provide a certificate of diagnosis issued by a medical institution (i.e. a domestic Grade III Class A hospital or above or a foreign hospital other than clinics or medical centers). 3.3.2.1 CEAIR may extend the duration of validity of the Ticket held by such Passenger to the date when the Passenger becomes fit to travel according to the certificate of diagnosis issued by doctors or to a soonest date after the aforesaid date in which the seats of the same class as purchased by the Passenger are available in a CEAIR flight. If a Ticket contains several Flight Coupons or the Flight Coupon of an Electronic Ticket combines one or more Stopover points, the duration of validity of such Ticket can be extended for no more than ninety (90) Days as of the date when the Passenger becomes fit to travel as indicated on the certificate of diagnosis issued by doctors. 3.3.2.2 CEAIR may extend the Tickets of the Passengers (2 persons at most) accompanying the sick Passenger to the same duration of validity as the sick Passenger. 3.3.3 In the event of death of any Passenger en route, the duration of validity of the Tickets held by the Passengers accompanying the defunct Passenger can be extended provided that any such extension shall be made upon receipt of the death certificate and the extended duration of validity of the Ticket shall be no longer than forty-five (45) Days from the date of the Passenger’s death. 3.3.4 If a Passenger is required to change any content of the carriage owing to a Force Majeure event, CEAIR will make every effort within a reasonable scope to carry the Passenger to the Stopover point or the place of destination indicated on the original Ticket without making any readjustment to the fare. 3.4 Loss and Mutilation of Paper Ticket 3.4.1 In the case of loss or mutilation of a Ticket or any part thereof held by a Passenger, such Passenger shall apply for reporting the loss of the Ticket to CEAIR in writing within the duration of validity of the Ticket. 3.4.2 When reporting the loss of the Ticket, the Passenger is required to produce his/her Valid Identification Certificates and a photocopy or fax copy of the issuer coupon of the lost Ticket. If the Passenger entrusts any other person for application, the applicant is required to produce his/her valid identification certificates together with the Valid Identification Certificates of the Passenger and any other materials and evidence as required by CEAIR. 3.4.3 CEAIR is not liable for any loss caused by any other person’s misuse or refund without permission of the Ticket before the application for reporting the loss of the Ticket. 3.4.4 In the case of loss of a Ticket, the Passenger’s application for reissuing a new Ticket shall be submitted within three (3) working days before the scheduled departure time of his/her flight, and any materials and evidence as specified in these Conditions shall be concurrently provided to CEAIR. After verifying the materials and evidence, CEAIR may reissue a new Ticket for the scheduled flight and charge fees for the reissuance of the Ticket if the following conditions are satisfied: 3.4.4.1 The Passenger shall fill in a Reissuance/Refund Application Form for Lost Ticket of CEAIR; 3.4.4.2 The Passenger shall declare and agree to indemnify any and all losses so caused to CEAIR, including any losses due to any other person’s misuse or refund without permission and any necessary litigation cost. 3.4.5 In the case of the lost Ticket unverified and unapproved, CEAIR has the right to refuse the reissuance of a new Ticket. In this case, the Passenger can only repurchase a new Ticket so as to get on board. 3.4.6 A reissued Ticket is irrevocable and non-refundable. 3.4.7 Tickets cannot be reissued in case of loss of any Open Ticket. 3.4.8 If a lost Ticket has not been misused or refunded without permission within thirty (30) Days after the expiry of the duration of validity thereof, CEAIR may make a refund and charge certain fees for the refund accordingly. 3.4.9 A Ticket cannot be used and refunded upon the application for reporting the loss. If the Passenger retrieves the lost Ticket or is informed of the whereabouts of the lost Ticket, the Passenger shall promptly inform the acceptance department of Ticket loss reports. If the Passenger retrieves the Ticket within the duration of validity thereof, the Passenger may make a refund at the acceptance department of Ticket loss reports. 3.5 Use Sequence of Flight Coupons 3.5.1 The Passenger shall finish all the itineraries listed on the Ticket within the duration of validity thereof. 3.5.2 If the first Flight Coupon of a Ticket has not been used and the Passenger requests for commencing his/her travel from a Stopover point or an Agreed Stopping Place, CEAIR has the right to refuse to accept such Ticket. Such Ticket may be refunded in accordance with Article 111.5 hereof. Article 4 Fares, Taxes and Charges 4.1 Applicable Fares 4.1.1 A fare refers to the fare for carriage by air from the airport at the place of departure to the airport at the place of destination, not including ground transportation service fees generated from within the area of airport, between terminals, between airports or between airports and downtowns, civil aviation development fund, bunker adjustment surcharge, and any other taxes and charges imposed by the country of destination on the Passenger. 4.1.2 A fare refers to the applicable fare of the designated flight at the time that the Passenger purchases a Ticket. If CEAIR makes any adjustment to the fare after selling a Ticket, the fare paid by the Passenger for the purchase of the Ticket shall remain unchanged. 4.1.3 The Passenger paying for Special Fares shall abide by the conditions applicable to such Special Fares. 4.2 Payment of Fares 4.2.1 Fares shall be paid by Passengers in the currency of the country where Passengers are located and subject to the payment method as required by CEAIR. Unless otherwise agreed by CEAIR and the Passenger, fares shall be paid in cash. 4.2.2 In the case that fares received by CEAIR are out of line with the applicable fare or are mistakenly calculated, the deficiency of fares shall be supplemented by Passengers or the overcharge thereof shall be returned by CEAIR. 4.3 Discount Fares 4.3.1 A child Ticket shall be purchased for a Child Passenger with a fare at an appropriate ratio of the Normal Fare for an adult, and CEAIR will provide the Child Passenger with a seat. 4.3.2 An infant Ticket shall be purchased for an Infant Passenger with the equivalent of 10% of the Normal Fare for an adult, and CEAIR will not provide the Infant Passenger with a seat. If the Infant Passenger is required to occupy a seat separately, the fare equivalent to a child fare shall be paid instead. If an adult Passenger carries more than one infant, the fare equivalent to a child fare shall be paid for each of the excess infants, and CEAIR will provide seats to such Infant Passengers. 4.4 Taxes and Charges To the extent permitted by applicable laws, any taxes or charges imposed by governments, relevant authorities or airport operators shall be paid by the Passenger and will be listed on the Ticket respectively and CEAIR will inform the Passenger before his or her purchase of the Ticket of such taxes and /or charges which are not included in the normal fare. 4.5 Currency Fares, taxes and charges shall be payable in any currency acceptable to CEAIR. When payment is made in a currency other than the currency in which the fare is published, such payment will be made at the rate of exchange ascertained by the country on the date of payment as notified by CEAIR. Article 5 Reservations and Purchase of Tickets 5.1 General Requirements 5.1.1 A Passenger planning to take a CEAIR flight shall book a seat with CEAIR or a CEAIR Passenger Sales Agent. A Reservation will be confirmed and valid only if the Passenger has produced relevant information and identification certificates as required by CEAIR and CEAIR has accepted the request for a specific flight designated by the Passenger. 5.1.2 If a Passenger fails to pay for the booked Ticket within the prescribed time limit, CEAIR may cancel his/ her Reservation. 5.1.3 CEAIR shall reserve the seats booked by Passengers within the time limit provided for or agreed in advance by CEAIR, and shall provide Passengers with seats in the confirmed flight and class of services. 5.1.4 Passengers shall comply with the Minimum Connecting Time respectively prescribed by any relevant airport or Carrier when booking seats on interline flights; if the transfer time is out of line with the flight transfer time standards, CEAIR will not accept the Reservations. 5.1.5 CEAIR may impose restrictions on certain discount fares in order to limit or exclude Passengers’ rights to change or cancel Reservations. 5.1.6 CEAIR may suspend Reservations of a certain flight if necessary. 5.2 Personal Information 5.2.1 A Passenger acknowledges the accuracy of his/her personal information provided to CEAIR and will assume any liabilities resulting from the inaccuracy of any information so provided. Such personal information is provided for the purpose of making Reservations, purchasing Tickets and obtaining relevant transportation services. CEAIR is authorized by the Passenger to retain and transmit the personal information to relevant governmental authorities at the place of destination, departments of CEAIR, other relevant Carriers or service providers. 5.2.2 A Passenger shall use the same Valid Identification Certificates when checking in and boarding as that used for Reservations and/or purchase of Tickets. 5.3 Reservation Priority 5.3.1 CEAIR is entitled to prioritize the Reservations with respect to important Passengers, emergency rescue, salvage, or any other Passengers in need of priority recognized by CEAIR. 5.3.2 Passengers who involuntarily change their itineraries may enjoy reservation priority provided that certain seats are available on the flight. 5.3.3 Passengers holding Tickets of which seats are unconfirmed on all or part of the Flight Coupons have no right to request for reservation priority when making Reservations. 5.3.4 Passengers holding Tickets of which seats have been confirmed on all or part of the Flight Coupons have no right to request for reservation priority when making changes in Reservations. 5.4 Reconfirmation of Reservations 5.4.1 Passengers do not need to reconfirm the confirmed seats on onward or return flights of CEAIR. 5.4.2 In an interline carriage, if a Passenger fails to reconfirm the seats on an onward or return flight as required by any Carrier other than CEAIR, such Carrier is entitled to cancel the Reservations on such onward or return flights made by the Passenger. 5.4.3 Passengers shall check the seat reconfirmation requirements of any relevant Carrier and process the seat reconfirmation formalities with Carriers who introduce their airline codes on Tickets. 5.5 Cancellation of Reservations 5.5.1 If a Passenger fails to purchase a Ticket within the time limit as prescribed or agreed in advance by CEAIR, the Reservation of seats will not be retained, including seats on an originating flight, onward flight or return flight. 5.5.2 Any change or cancellation of a Reservation by a Passenger shall be produced within the time limit as prescribed by CEAIR. Any change or cancellation of a Reservation shall comply with the restriction conditions (if any) imposed on the fare. 5.5.3 If a Passenger fails to use the confirmed seat without notifying CEAIR, CEAIR will not be liable for any cancellation of seats so caused on the onward or return flights. 5.6 Purchase of Tickets 5.6.1 Passengers may purchase Tickets at the ticket offices of CEAIR or CEAIR Passenger Sales Agents, or on the official website of CEAIR (www.ceair.com). Passengers may also make inquiries and purchase Tickets through the CEAIR Hotline. The CEAIR Hotline number is 95530. Direct Marketing Service Hotline of CEAIR official website is 4008695530. 5.6.2 A Passenger shall complete the Passenger Reservation Document with his/her Valid Identification Certificates in order to purchase Tickets; in the case of purchasing Tickets through websites or CEAIR Hotline, a Passenger shall produce information to CEAIR as required, including his/her Valid Identification Certificates, contact number, etc.; the Passenger shall be liable for the authenticity of the foregoing information. The Passenger shall ensure that the Valid Identification Certificates used for purchasing Tickets are consistent with those used during check-in. 5.6.3 Valid Documents evidencing the birth dates of children and infants shall be produced for purchase of child and infant Tickets. 5.6.4 A Passenger in the following conditions shall produce a valid diagnosis certificate and fill in the Flight Application Form for a Special Passenger Named ( ) upon CEAIR’s consent before purchasing Tickets: 5.6.4.1 The Passenger who is pregnant for more than 32 weeks; or 5.6.4.2 The Passenger who is travelling in a stretcher or incubator; 5.6.4.3 The Passenger who needs medical oxygen during a flight; or 5.6.4.4 The Passenger whose medical condition is such that there is a reasonable doubt that the individual can complete the flight safely, without requiring extraordinary medical assistance during the flight. The diagnosis certificates shall be issued by the medical institutions (i.e. a domestic Grade III Class A hospital or above or a foreign hospital other than clinics or medical centers) within 48 hours before the travel. The diagnosis certificate produced by a Passenger with serious disease (cardiovascular, cancer, acute trauma, etc.) shall remain effective for 24hours. A Passenger with more than 36 weeks of pregnancy shall not purchase Tickets. 5.6.5 Each Passenger shall respectively hold his/her own Ticket. 5.6.6 If a Passenger pays the fare within the agreed ticketing time limit, CEAIR or a CEAIR Passenger Sales Agent is responsible for issuing the Ticket. 5.6.7 A Passenger who has paid the fare shall collect and verify the information on the Ticket or the Itinerary. 5.6.8 If a Passenger requests for reserving the seat due to special circumstances, upon CEAIR’s consent, the Passenger shall purchase the Ticket within the ticketing time limit indicated in the reservation records. 5.6.9 A child under 5 years of age shall be accompanied by an adult with full capacity for civil conduct; if a child who has reached 5 years of age but under 12 years of age wishes to take a flight accompanied, such child shall apply for carriage of unaccompanied children to CEAIR first and may purchase a Ticket upon CEAIR’s consent. An infant under 14 Days of age will not be accepted by CEAIR for carriage. 5.6.10 An adolescent Passenger between 12 and 15 years of age may take a flight alone, or may apply for carriage of unaccompanied children if necessary. A Passenger under 18 years of age shall not carry an infant or child alone. 5.7 Ticketing Time Limits If a Passenger fails to pay the fare within the ticketing time limit specified by CEAIR after the Reservation, CEAIR or any CEAIR Passenger Sales Agent may cancel the Reservation. 5.8 Seats Arrangement CEAIR reserves the right to reassign the seats which have been occupied by Passengers after boarding due to flight or security reasons. (Please see Article 17.2 hereof) Article 6 Overbooking 6.1 According to the practice of carriage by air, CEAIR may conduct proper Overbooking for flights with certain seats easily wasted as the case may be. In the event of Overbooking, CEAIR will notify the Passengers of the Overbooking situation, compensation plans and rights enjoyed by the Passengers before the Passengers check in. 6.2 In the event of Overbooking, CEAIR will properly compensate the Volunteers of Denied Boarding according to the compensation plans and arrange suitable flights or make refunds as required by them. Under the circumstances that not enough Passengers voluntarily give up boarding of the flight, CEAIR will refuse carriage of certain Passengers according to priority boarding rules ascertained by CEAIR. 6.3 If the Passengers being refused decide to continue the journey, CEAIR will arrange such Passengers to take the soonest flight in corresponding classes, and make appropriate compensation in line with relevant provisions based on the original flight and the delayed time. Article 7 Check-in and Boarding 7.1 General Provisions 7.1.1 Check-in Closes Time is different at every airport and Passengers must arrive at the airport within the time limit specified by CEAIR and go through formalities of verifying the Ticket, checking Baggage and obtaining the boarding pass with his/her Valid Identification Certificates and Ticket on time. 7.1.2 In avoidance of flight delays, CEAIR may cancel the confirmed seat of a Passenger who fails to arrive at CEAIR’s check-in counter or boarding gate or fails to produce his/her Valid Identification Certificates or carriage document. CEAIR shall not be liable for any losses or expenses caused by the Passenger’s failure to comply with the provisions of this Article. 7.1.3 CEAIR shall start check-in no later than 150 minutes before the scheduled Departure Time of the flight indicated on the Ticket, and close check-in 45 minutes before the scheduled Departure Time of the flight indicated on the Ticket, unless otherwise announced. (Please make inquiries through CEAIR Hotline 95530 for details). 7.1.4 CEAIR and CEAIR Ground Services Agents shall open check-in counters on time and duly process check-in formalities. Passengers and their Baggage must go through a security check before boarding the aircraft. 7.1.5 As for the commencement and closing of check-in for any onward connecting flight during the interline carriage, Passengers shall make inquiry with the Operating Carrier. 7.2 Seat Arrangements on the Aircraft 7.2.1 Besides providing Passengers with the seats according to the confirmed flight and class of services, CEAIR will endeavor to satisfy Passengers’ request for seat category in the same class of services but will not guarantee a particular seat on the aircraft requested by any Passenger. 7.2.2 To ensure flight safety, seats near the aircraft’s emergency exits shall be specifically arranged by CEAIR. 7.2.3 For the purposes of operations, safety or security, CEAIR reserves the right to assign or reassign the seats on the aircraft at any time, even after Passengers get on board the aircraft and/or are seated on the aircraft. 7.3 No-show of Passengers 7.3.1 If a No-show occurs, a Passenger holding a Normal Fare Ticket shall change the flight or make a refund at the airport of departure or the original ticketing place. 7.3.2 If a Passenger requests to take a subsequent flight upon the occurrence of No-show, CEAIR will arrange a seat for and charge certain fees to the Passenger as prescribed by the Regulation of CEAIR provided that there are available seats in the subsequent flight; if the Passenger requests for a refund, CEAIR may charge refund fees according to conditions applicable to such Ticket. 7.3.3 If a No-show occurs, a Passenger holding a Special Fare Ticket shall be subject to the applicable conditions to such Ticket. 7.4 Missing Flight of Passengers 7.4.1 In the event of Missing Flight due to a Passenger’s reasons, the refund requested by the Passenger shall be subject to the provisions on No-show. 7.4.2 In the event of Missing Flight due to CEAIR’s reasons, CEAIR shall arrange the soonest subsequent flight for the Passenger to take, or process as specified in Article 111.4 of Involuntary Refunds under these Conditions. 7.5 Wrong Plane of Passengers 7.5.1 If a Passenger gets on board a wrong flight, CEAIR will arrange such Passenger to travel on the soonest flight to the place of destination listed on the Passenger’s Ticket, with no overcharge to be returned or deficiency to be charged. 7.5.2 If the Passenger’s Wrong Plane occurs due to CEAIR’s reasons, CEAIR shall arrange the Passenger to travel on the soonest subsequent flight. The refund requested by the Passenger shall be subject to Article 111.4 of Involuntary Refunds under these Conditions. 7.6 Misconnection of Passengers In the case of Misconnection of the Passenger caused by CEAIR during an interline carriage, CEAIR, as a preceding Operating Carrier, shall arrange for the Passenger at the connecting point. 7.7 Boarding 7.7.1 Passengers shall arrive at the boarding gate within the time limit as specified by CEAIR according to the important notices on the boarding pass. 7.7.2 CEAIR will cancel the Reservation made by a Passenger who fails to comply with Article 7.7.1 hereof and fails to get on board the aircraft within the specified time limit before the closing of the aircraft door. CEAIR shall not be liable for any losses so caused to the Passenger. Article 8 Baggage 8.1 General Provisions 8.1.1 Items Unacceptable as Baggage
Items specified in the Technical Instructions for the Safe Transport of Dangerous Goods by Air of the International Civil Aviation Organization (ICAO) and the Dangerous Goods Regulations of the International Air Transport Association (IATA), items the carriage of which are prohibited by the laws, regulations or orders of the People’s Republic of China, or items which are likely to endanger the aircraft or people or property on the aircraft as specified in the Regulation of CEAIR. A Passenger shall not place in his/her Baggage or carry on to the cabin the following items, or otherwise CEAIR will refuse to provide carriage to the Passenger: 8.1.1.1 Items that do not constitute Baggage as defined in Article 1.40 of these Conditions; 8.1.1.2 Dangerous goods (including without limitation): (1) Explosives; (2) Gas, including flammable gas, inflammable and nontoxic gas, and toxic gas; (3) Flammable liquid; (4) Flammable solid, spontaneous combustible substance; substance that will release flammable gas in contact with water; (5) Oxidizer and organic peroxide; (6) Toxic substance and infectious substance; (7) Radioactive substance; (8) Corrosive substance; (9) Miscellaneous dangerous goods. 8.1.1.3 Firearms, ammunition, or military or police equipments (including key components), except those satisfying the requirements provided for in Article 1.1.18.1.3.9 of these Conditions. (1) Military guns or guns for official use: handgun, rifle, submachine gun, machine gun, baton gun, etc. (2) Civil guns: air gun, anesthesia gun, etc. (3) Other guns: sample gun, prop gun, etc. (4) Military equipments or police equipments: spontoon, military or police dagger or bayonet, etc (5) Guns or equipments prohibited by the PRC: Ball gun, tear gas gun, taser, defibrillator, or defense device; (6) Imitation of foregoing items. 8.1.1.4 Controlled Knives Knives listed in the Interim Provisions on Controlling Certain Knives promulgated by the Ministry of Public Security, including daggers, knives with three edges (including fluted scraper used in machine work), knives with self-lock device, backswords similar with but longer than daggers, knives with double edges, and other similar backswords, knives with double edges, sharp knives with three edges, except those satisfying the requirements provided for in Article 1.1.18.1.3.1 of the Conditions; 8.1.1.5 Other Items (1) Items which are unsuitable for carriage by reason of their weight, size, package, shape or character; (2) Live animals: wild animals or/and animals with strange shape or easily to attack humans (i.e. snake), except those satisfying the requirements provide for in Article of the Conditions; (3) Fresh perishable items with obvious peculiar smell, such as durian, etc; (4) Items easily to defile the aircraft; (5) Magnetic substance; (6) Substance which makes people anesthetized or unpleasant, or substance with other similar nature; (7) Items unsuitable for carriage according to national laws and regulations or the Regulation of CEAIR. 8.1.1.6 Items prohibited from exiting from, entering into, or transiting in, relevant countries according to laws, regulations or orders of such countries. 8.1.2 Items Unacceptable as Checked Baggage A Passenger shall not include or place in Checked Baggage the following items: items which need specific custody, such as cash, negotiable instrument, valuable securities, bill of exchange, fragile or vulnerable items, perishable items, jewelry, precious metal or articles thereof, gold and silver articles, antiques and valuable paintings, videos which are out of print, presswork or manuscripts which are out of print, samples and valuables, important documents and materials, diplomatic envelopes, travelling documents, computers and accessories, and personal communication devices and accessories, personal digital devices and accessories, etc., and prescribed drug that needs to be taken regularly. Please see liability for damage specified in Articles 12.118.3.4 and 12.118.3.8 hereof. 8.1.3 Restricted Items on Carriage 8.1.3.1 Blunt, cold steel or similar items other than controlled knives may be carried as Checked Baggage, provided that the package of the foregoing items shall be appropriate; and the foregoing items may not be carried into cabin. 8.1.3.2 Medicines or cosmetics which are necessary during the journey, such as drugs containing alcohol, hair conditioner or perfume. 8.1.3.3 Dry ice intended for perishable items. 8.1.3.4 Alcoholic beverage. 8.1.3.5 Toy guns shall be carried as Checked Baggage, and may not be carried into the cabin. 8.1.3.6 Precise instrument, electronics, metals or batch objects shall be carried as cargo. Free Baggage Allowance does not apply to such items. 8.1.3.7 Liquid, gels and aerosols hand-carried by each Passenger shall be put in the container the capacity of which is no more than 100 ML separately, and the total volume of the foregoing items shall not exceed 1 L. 8.1.3.8 The electric wheelchair used by the Passenger during the journey. 8.1.3.9 Firearms and ammunition for hunting and sporting purpose may be carried as Checked Baggage with the firearms carriage license or the approval issued by relevant authorities of the State Council, but may not be carried into the cabin as Unchecked Baggage or carry-on items. Firearms must be unloaded with the safety catch on, and suitably packed. The carriage of ammunition shall be dealt with pursuant to relevant regulations on dangerous goods transportation. 8.1.3.10 Bulky musical instruments are not suitable to be carried as cargo. For the bulky musical instrument whose weight and size exceed the allowance of Unchecked Baggage, such musical instrument shall be charged separately as cabin-seat Baggage in the passenger cabin, and be taken care of by the Passenger. 8.1.3.11 Lithium battery may not be carried as Checked Baggage. 8.1.4 Please visit the CEAIR’s official website (www.ceair.com) or inquire with CEAIR Hotline 95530 to find more information on restricted items on carriage. 8.2 Checked Baggage 8.2.1 Upon delivery to CEAIR of Baggage to be checked, CEAIR will issue an Identification/Claim Baggage for each piece of Checked Baggage. 8.2.2 A Passenger shall attach his/her name or other personal mark to the Checked Baggage before checking it in. 8.2.3 Checked Baggage will be carried on the same aircraft as the Passenger, unless special circumstance occurs, under which CEAIR will explain the situation to the Passenger and will carry it on a subsequent flight if the space on that flight is available. 8.2.4 Checked Baggage must be well packed with suitcase or other proper container, locked and bound, and must be able endure a certain amount of pressure, and can be safely loaded, unloaded and carried under normal operation conditions; CEAIR may refuse to carry as Checked Baggage, and/or not liable for damages or losses of, Baggage whose package does not meet the requirements. 8.2.5 Each Checked Baggage must not exceed 32kg in weight and the three dimensions shall not exceed 40cm, 60cm and 100cm. The carriage of Baggage exceeding the foregoing limit shall be subject to the prior consent of CEAIR. 8.3 Unchecked Baggage 8.3.1 Each Unchecked Baggage must not exceed 10kg in weight and the three dimensions shall not exceed 20cm, 40cm and 55cm respectively. 8.3.2 Unchecked Baggage should be stowed under the seat in front of the Passenger or in an enclosed storage compartment in the cabin. Items exceeding the allowance of weight or size provided for in Article 8.3.1 hereof may not be carried into the cabin. 8.3.3 Each First Class Passenger is allowed to carry on up to two pieces of Unchecked Baggage; each Business Class or Economy Class Passenger is allowed to carry on up to one piece of Unchecked Baggage. 8.3.4 The Unchecked Baggage which exceeds the aforesaid allowance of weight, amount, or size shall be checked as Checked Baggage. 8.4 Free Baggage Allowance 8.4.1 Free Baggage Allowance covers both Checked Baggage and Unchecked Baggage. 8.4.1.1 Weight concept of Free Baggage Allowance: the Free Baggage Allowance for an adult Ticket or a child Ticket in First Class is 40kg; the Free Baggage Allowance for a Business Class Passenger is 30kg; and the Free Baggage Allowance for an Economic Class Passenger is 20kg. The Free Baggage Allowance for each infant Ticket is 10kg. 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A10 Monday, September 28, 2015
Opinion BusinessMirror
editorial
Another Philippine world record?
T
he Philippines does not hold the world record, but we are right up there in contention for that honor. Looking at the results of our regional neighbors, the Philippines comes in with a 2015 score of “19,” while our closest competitor is the Malaysian capital of Kuala Lumpur, with “15.” Thailand is close behind with “14,” as is Jakarta, Indonesia. Singapore, on the other hand, is not even in the running, with a score of only “11.”
But the high ranking of the Philippines does come with a price. It costs the Philippine economy about P8,000 for every man, woman and child in the country. We are speaking of the 19 national holidays, when productive work is significantly curtailed. By the end of 2015, the Philippines will have celebrated 19 “regular” and “special nonworking” holidays, ranging from the regular New Year’s Day on January 1st to the special nonworking day to commemorate the “last day of the year” on December 31st. To be fair, one of this year’s holidays—All Saints’ Day—falls on a Sunday, so the economic impact is reduced. But that is only a twist of the calendar, because in 2016 both Monday, October 31, 2016, and Tuesday, November 1, 2106, will be nonworking days. The total Philippine economic output for 2014 amounted to approximately P45 billion per day, based on a conservative 300-business-day year. Even if we assume that the nonworking holidays still generate even 50 percent of the normal daily economic production, we are still talking about a loss of some P400 billion of economic activity. Of course, that money is not taken directly out of our pockets, although the government does lose a substantial amount of tax revenues from the income that is not produced. But it is an opportunity loss in the same way that we complain about the loss of productive hours sitting in traffic jams. Holidays are important to take time to observe national historic events and to celebrate the lives of our national heroes. Religious holidays, while limited to the followers of those religions, might be important to commemorate as a part of society’s history and structure. But where exactly does December 24th, as an “additional special nonworking day,” fit into the social, historical, or religious fabric of the Philippines? That sounds more like a schoolchild complaining to stay home and watch TV, instead of going to school “just because.” We need to rationalize this holiday schedule. Singapore has a very diverse multicultural and multireligious society, yet, it only has 11 nonworking days. Singapore limits its historical and heroes holidays to only one: its national independence day. China has many holidays (16), too, but the economy compensates by working on a traditional off-day, like Saturday or Sunday. The Philippines will lose almost 20 percent of its productive Mondaythrough-Friday working days from November 30, 2015, until January 2, 2016. Does that really make economic sense?
Lumban: The country’s ‘embroidery capital’ Atty. Jose Ferdinand M. Rojas II
RISING SUN
I
t was an honor to be invited as the guest speaker at the opening ceremony of the Lumban, Laguna, 437th town founding anniversary festivities. day, it was difficult for the judges to make their selection. Having myself seen and purchased fine examples of Lumban embroidery work, such as barong Tagalog and other items, I can say that the quality of the work is impressive and something that we can be proud of as Filipinos. Among the items we saw on display at the venue were not only barong, but also heavily embroidered ladies’ tops, skirts, dresses and gowns; hand-painted and beaded scarves that transform ordinary dresses into festive garb; accessory and jewelry pouches; hand-painted fabric fans; and other examples of the town’s best products. It is interesting to see how materials as simple as fabric and thread can be transformed into breathtaking works by the artistry and skill of Lumban’s designers, embroiderers and finishers. We look forward to how the town’s designers and artists can extend their skills into other fields, such as haute couture and fine arts (through textile art), and how the
The event, held at the Lumban covered court on September 22, also saw the official launch of the Burdang Lumban town festival, with this year’s theme being “Burda ng Malikhaing Lumbeño, Ipagmalaki sa Buong Mundo.” My thanks to Mayor Reynato Añonuevo for the warm invitation and welcome that I received, and also to other officials, including Vice Mayor Rolando Ubatay and Vice Gov. Atty. Karen Agapay. The town of Lumban has made itself known as the embroidery capital of the country, and its people take great pride in their craftsmanship. In the same manner, another Laguna town of artisans, Paete, is famous for the skill of its woodworkers. The dress code at the event was “Filipiniana,” and the attendees took the opportunity to come in their best finery of barong Tagalog and baro at saya, in different colors and styles. There was an award bestowed for the best-dressed in ladies’ and men’s wear, and given the beauty of the outfits worn that
Online libel Atty. Lorna Patajo-Kapunan
A
legally speaking
s a lawyer, I often receive inquiries in my social-media accounts about online libel. In this day and age, where the Internet has become part of every Filipino’s life, and where most, if not all of us, use the cyberspace every single day, knowing the parameters in the use of the Internet will save a lot of netizens from trouble.
On July 25, 2011, Congress passed and the President approved Republic Act 10175, otherwise known as the Cybercrime Prevention Act of 2012 (“Cybercrime Law”), which, among others, made online libel unlawful. Section 4(c) (4) thereof states that “the unlawful or prohibited acts of libel as defined in Article 355 of the Revised Penal Code [RPC], as amended, committed through a computer system or any other similar means which may be devised in the future,” constitute the offense of cybercrime. On August 12, 2015, the departments of Justice, Interior and Local Government, and Science and Tech-
nology, pursuant to the authority granted to them under the said law, promulgated the rules and regulations implementing the said law. Section 5(3) thereof spelled out the penalty for the crime of online libel— prision correccional in its maximum period to prision mayor in its minimum period, or a fine ranging from P6,000 up to the maximum amount determined by court, or both. Prision correccional carries with it the penalty of imprisonment ranging from six months and one day to six years, while prision mayor carries with it the penalty of imprisonment for six years and one day to 12 years. Considering the gravity of the penalty of the crime of online libel,
entrepreneurs can use their marketing skills to promote the products they create, to contribute to the economic and social development of Lumban. Once again, happy 437th anniversary to the town of Lumban! nnn
The Philippine Charity Sweepstakes Office (PCSO) will be distributing around 700 ambulances this year, as circumstances permit. In line with this, last week I and fellow PCSO Directors Mabel Mamba and Francisco G. Joaquin III traveled to Cagayan de Oro City to turn over 11 ambulances to the provinces of Misamis Oriental and Bukidnon. We also conducted other agency activities there, including the blessing of the newly transferred PCSO branch office and the turnover of checks to the local government unit (LGU) for its PCSO Lotto shares. The ceremony was held on September 24 at the PCSO branch office at the Abap Building in Cagayan de Oro City, which was “rented” to the agency at P1 per year by the provincial government, headed by Gov. Yevgeny Emano, who was present at the event. Also with him were Rep. Rufus Rodriguez of the Second District and Party-list Rep. Maximo Rodriguez Jr. of Abante Mindanao, and others from the LGU, representatives of the ambulance recipients and other guests. Those that received brand-new PCSO ambulances were Cagayan de Oro City, Northern Mindanao
it is best to know what constitutes this crime. Since the libel provision of the Cybercrime Law merely incorporates to form part of it, the provisions of RPC on libel, how the latter law defines this crime finds application to the former. Under Article 353 of the RPC, a libel is a public and malicious imputation of a crime or of a vice or defect, real or imaginary, or any act, omission, condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person, or to blacken the memory of one who is dead. Article 355 of the same law further provides that a libel is committed by means of writing, printing, lithography, engraving, radio, phonograph, painting, theatrical exhibition, cinematographic exhibition, or any similar means. Thus, a netizen who posts something, be it in words or pictures, which is intended to harm the reputation of another by tending to bring the target into ridicule, hatred, scorn or contempt of others may be found guilty of online libel. However, the Supreme Court (SC) clarified in the consolidated cases of Disini, et. al vs. the Secretary of Justice, et. al (GR No. 203335, 11 February 2014) that online libel
Medical Center, Central Mindanao University (Bukidnon), Mindanao University of Science and Technology, Misamis Oriental State College of Agriculture, Mindanao State University (Marawi), Misamis Oriental Cares Tagoloan, Inatao, Balingasag, Opol and Magsaysay. In June we also turned over eight ambulances to the same two provinces: to Claveria, JR Borja, Libertad, Naawan, Talisayan, and Villanueva in Misamis Oriental, and to Cabanglasan and Valencia City in Bukidnon. These vehicles are distributed to qualified LGUs, hospitals, state agencies and associations under t he PCSO A mbu l a nce Donation Program. We also handed checks worth a total of P3.6 million to Cagayan de Oro City (P3.4 million) and to Misamis Oriental (P213,601.20), their LGU shares from the operations of PCSO Lotto outlets in their areas. The more outlets there are in an area and the higher the PCSO sales generated, the higher the LGU shares are that will benefit the people there and contribute to their well-being and the area’s development. In its 81st year, the PCSO continues to serve the people by providing medical- and health-care-related services that have made the agency a beacon of hope for those in need. Atty. Rojas is the vice chairman and general manager of the Philippine Charity Sweepstakes Office.
brings with it certain intricacies, unheard of when the provisions on libel in the RPC were enacted and that the culture associated with Internet media is distinct from that of print. The SC explained that the Internet is characterized as encouraging a freewheeling, anything-goes writing style. In a sense, they are a world apart in terms of quickness of the reader’s reaction to defamatory statements posted in cyberspace, facilitated by one-click reply options offered by the networking site, as well as by the speed with which such reactions are disseminated down the line to other Internet users. Thus, only the original author of the libelous post is punished under the Cybercrime Law. Those who liked, shared, or retweeted a post, or those who merely made a favorable comment thereon, the person who posted a link to the blog site where the same was posted, or others who simply received the post and reacted to it are not liable for online libel. The Supreme Court considered these persons to be merely knee-jerk sentiments of readers who may think little or haphazardly of their response to the original posting. Continued on A11
Opinion BusinessMirror
opinion@businessmirror.com.ph
Monday, September 28, 2015 A11
Unbelievable stupidity Teddy Locsin Jr.
Free fire
T
he DNA test to establish Grace Poe’s racial credentials as a Filipino is wrong in every way. You are Filipino if no one can prove you are not. No person should ever be put to the test of his or her religion or race, not least because our race is widely regarded as inferior, as opposed to the Chinese, Japanese, American and European races in every field except amateur singing, and the African race in athletics. We are short and lack the majesty and easy grace that height confers. Despite our diminutive size, however, we lack the speed of a cockroach. Our only quality is our decency. We have never indulged in mass murder, unlike the races aforementioned; Rwanda being the latest manifestation of the common characteristic shared by the superior races. On the contrary, we Filipinos are given to gestures of mass kindness as when de Lima offered to take in Rohingyas fleeing Buddhist mass murderers.
The problem with a DNA as legal proof of ethnicity to qualify for the presidency is that it will be used after we are invaded by a superior race to establish which of us has enough of the invader’s DNA to go on living in the countr y they conquered. After all even Nazis let Jews live, provided they proved a legal minimum of Germanicness. Poe was turned over to her adopted parents in the Philippines, as a foundling found there, and not shipped from elsewhere. When she was grown up, she married an obviously ethnic Filipino—just going by the height, or lack thereof, of the bridge of his nose. (Mine is Roman in altitude.) And then she
did what all Filipinos are dying to do except those too lazy to work: she adopted the citizenship of the United States. There she worked at a wholesaler’s. Like all Filipinos so fortunate, she reacquired, by a redeclaration of allegiance, her Filipino citizenship by means of a law of which I was a principal author. In any case, changes of citizenship are not a disqualification for high office. Natural born is a fact that no law or legal act to the contrary can overturn. It is just the fact that when you emerged f rom you r mot her ’s Fi l ipi no v a g i n a , y ou w e re n at u r a l l y born a Filipino. You are or you are not Filipino.
And the burden of proof is on the shoulders of those who say you are not because they cannot beat you in a fair election. They should try cheating instead. It is less of a
threat to the survival of our race. A DNA test—like the reproductive law definition of “ humans” as “economic assets fit to live” thereby excluding Filipino,
as compared to harder working and economically more productive Chinese, as humans—is how one stupid race declares that its fitness must be proved, first in
the case of the presidency—a position historically best used for stealing—and then of our continued existence in this world. Unbelievable.
Philippine Tax Academy: The envisioned center of learning for government tax collectors and CPAs Joel L. Tan-Torres
DEBIT CREDIT Tax Academy models
Part 2
T
he tax academy of the Philippines follows the model of similar dedicated learning institutions for tax authorities globally. Most tax authorities of the developed countries, including the United States of America, Great Britain, Germany, Australia and others have training institutions catering to the learning requirements of their tax collectors. In Asia, such countries as Japan, China, Malaysia, Singapore and India have these tax academies training their tax collectors. I visited the National Tax College (NTC) of the National Tax Administration of Japan in 2009. My observations and findings of the way the NTC is operated greatly inf luenced the Philippine Tax Academy (PTA) legislation that we drafted. The NTC of Japan is an institution that provides training to Japan’s tax officials as national public employees. The NTC consists of the Central Institute—composed today of the Kasumigaseki Office and the Wako Campus—and 12 regional training centers located throughout Japan. The Wako Campus is the ideal training facility, with its enviable resources of administration building, several training buildings, and auditorium, a student center, a gymnasium, several dormitory buildings with condominium-like rooms, and even a tax museum. The National Tax Agency employs a staff training system structured around the following
Online libel Continued from A10
The foregoing notwithstanding, netizens should be reminded that even if they are not the original author of a libelous post, should their comment thereon transgress what the SC defines as a random and spontaneous reaction to a post, but actually creates an altogether new
three pillars: (1) Group training programs provided by NTC; (2) On-the-job training individually provided by supervisors and duty advisors in the course of everyday work; and (3) Group training courses held at the workplace. The NTC also trains new recruits from high school and universities so that they can carry out the duties expected of them as tax officials. The NTC provides regular job training update programs for tax officials who are already working in the field, enabling them to keep pace with the most recent changes. Furthermore, the NTC engages in academic surveys and research on taxation while providing international training programs for overseas tax officials mostly from Asia as part of international cooperation activities. In fact, the NTC has regularly been providing training to Bureau of Internal Revenue (BIR) officials who go to Japan for these courses for several years already. defamatory story against another, said comment may be considered an original posting published on the Internet, making them guilty for online libel. Thus, before posting anything online or comment on a post in any social-networking site, netizens should first think about its repercussion. As one television network puts it, “Think before you click.”
The PTA can also follow the lead of other training institutes and academies in the Philippine bureaucracy, including the Department of Trade Industry, Philippine Trade Training Center, Civil Service Institute, Philippine Military Academy, Philippine National Academy, Philippine Judicial Academy, Bangko Sentral ng Pilipinas Institute, Commission on Audit Professional Development Center, Department of the Interior and Local Government-Local Government Academy, National Education Academy, Foreign Service Institute, National Defense College, National Economic and Development Authority Statistical Research and Training Center, COA Professional Development Center, Development Academy of the Philippines, Technical Education and Skills Development Authority, and the Department of Science and Technology -Technology Resource Center. Therefore, the PTA has already several success stories that it can follow both on the local, as well as international area.
Status of the Philippine Tax Academy Act
REPUBLIC Act (RA) 10143 provides that the Secretary of finance, in coordination with the commissioner of the BIR, commissioner of the Bureau of Customs (BOC), and the executive director of the Bureau of Local Government Finance (BLGF), and in consultation with representatives from academe, shall issue the implementing rules and regulations (IRR)within 90 days from the effectivity of the law. However, after more than five years from the passage of the law, the IRR have not yet been issued and hence, the PTA unfortunately has not been established to date. The Senate Tax Study and Research Office (STSRO), in its Tax Bits publication of July-August 2013, published an article entitled “RA 10143: A Case of Law Impoundment?” The article discussed the features of the law and cited that several stakeholders, including the STSRO, representa-
tives from concerned sectors, such as academe were active participants in the drafting of the IRR for the PTA. The group tasked to draft the IRR was chaired by the Finance Undersecretary Carlo Carag, sometime in 2011. The article also disclosed that in February and April 2013, the STSRO, through Director General lawyer Rodelio Dascil, wrote a follow-up letter to Finance Secretary Cesar V. Purisima and Carag inquiring on the status of the IRR of RA 10143. The article raised the issue that several years have passed since the 15th Congress, which legislated the PTA Act ended on June 30, 2013. The article raised two questions: Where is the IRR for the Tax Academy? W hy have the Department of Finance (DOF), BIR, BOC and BL GF ref u sed to i mplement RA 10143? On September 29, 2014 and May 25, 2015, I, as chairman of the Board of Accountancy (BOA), wrote to Carag. I cited the interest of the BOA on the IRR of the PTA Act since the academy, once established, will provide the training for the tax collectors of the BIR, BOC and local government unit (LGU), including the certified public accountants (CPAs) in the aforementioned offices. As such, the BOA is interested in knowing and assisting in the immediate implementation of this law which will benefit the government CPAs which are stakeholders of the BOA. In said letters, I also indicated to Carag that I was previously involved in the drafting of the PTA Act and the initial planning for the implementation of the same when I was the senior deputy commissioner and commissioner of internal revenue from November 2009 to December 2010. I also indicated that the implementation of the law will greatly benefit the government service of the three offices and should be implemented as soon as possible. Though I still have to be given the IRR, I have since then been contacting the DOF to move for-
ward the issuance of the IRR for the establishment of the academy. I understand that the IRR will soon be approved.
Moving forward
I believe that it is a matter of time before we will have a PTA that will redound to the benefit of both the tax collectors and the tax-paying public. Once the IRR is issued by the DOF, the detailed planning for the implementation and establishment of the academy can proceed. What are the requirements for this implementation? Securing a budget appropriation for the PTA must be included in the DOF budget. The DOF is the mother agency responsible for the BIR, BOC and BLGG. Thus, it is the DOF which should include in the department budget the funds for the initial implementation of the academy. The Board of Trustees (BOT) must convene immediately. This will require appointments by the President of the Philippines from a nominee list to be submitted by the secretary of finance. The nominees shall include the three representatives from academe. The representative of the DOF, who is designated as the chairman of the board, must call the seven-man BOT for an organizational meeting to discuss the initial implementation and policy issues for the establishment of the academy. The secretary of finance must appoint the executive officers of the academy consisting of the President and three chancellors and vice chancellors to administer the institutes for the BIR, the BOC and the BLGF. The executive officers must prepare the strategic and implementation plans for the academy and the three institutes. These shall include formulating the mission and vision of the academy; the venue for the academy and its facilities; the staffing pattern for the administration of the academy; the staffing pattern for the faculty and trainors of the academy; the training curriculum for the three institutes, which shall include a “ ladderized ” pro-
gram for the entire career of ta x collectors; the admission policies for new recruits of the three ta x-collecting agencies, linkages with external organizations tobe established, and many other concerns. A potential venue for the academy and its facilities can be the BIR Regional Office in San Pablo, Laguna. This is a relatively newly constructed facility of the BIR with a large land area for expansion. The site is appropriate for live-in training of tax officers that is somewhat secluded from the distractions of a metropolis. At the same time, the BIR Regional Office can relocate to a more proximate location in Calamba, Laguna, where the regional government center for Region 4A is located. In formulating these policies, strategies and procedures, consultations with the various stakeholders should be done. These stakeholders include the tax experts from the various professional and private sector organizations, including the Philippine Institute of Certified Public Accountants, the Tax Management Association of the Philippines, the Integrated Bar of the Philippines. Consultations should also be made with the various government and private sector academic and training organizations. The ongoing training and human resource programs of the BIR, BOC and LGUs should be reviewed and integrated in the programs of the academy. The various studies conducted on the training requirements and programs of the three agencies should be retrieved a nd re v ie w e d to d e t e r m i ne its relevance. Assistance in conducting this implementation planning can be secured from the various international developmental organizations, such as the International Monetar y Fund, Word Bank, USAID, Jica, GTZ, AusAid, Asian Development Bank, UNDP, CIDA, OECD, and others. With all these in place, it will be a matter of time when the PTA will be a reality and serving the needs of the tax-collecting agencies and the tax-paying public.