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Monday, February 22, 2016 Vol. 11 No. 137
P. | | 7 DAYS A WEEK
MRT 3 buyout before May polls not possible–DOTC
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OMPLETING the equity value buyout of the corporate owner of the Metro Rail Transit (MRT) Line 3 before the May elections may be close to impossible, as state officials have just agreed on how to address the issues hounding the proposal.
Constitutional 60/40 foreign ownership rule and the PSE
Transportation Secretary Joseph Emilio A. Abaya acknowledged that completing the P54billion endeavor before then might prove problematic, as its outcome will depend on how the arbitration case in Singapore turns out.
“This is arbitration, it’s not as if we just sign an agreement and everything is done. It’s an arbitration court and these are all subject to arbitration procedures,” he said in a spot interview. “This is an arbitration proceeding, it’s like going
BEHIND THE SCENES: PPP OPPORTUNITIES FOR INTROSPECTION
₧54B
PPP Lead
Value of the MRT 3 buyout deal
Alberto C. Agra Second of three parts
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to court with another party there. No one ever assures you of a time line if you go to a quasi-judicial or a full judicial body.” Last October Abaya expressed optimism that his camp can execute the transaction within the term of President Aquino despite all the roadblocks the government has hurdled. “Apparently, there are a lot of issues to it. The government
HE real score and real numbers must be made known. Publicprivate partnerships (PPPs) are so much more than what is reported by the PPP Center. PPPs go beyond the build-operate-transfer law. C A
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PPP PROJECTS
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OUTSIDE THE BOX
Water
Government Buildings
Power
Parks
John Mangun
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Reclamation
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Malls
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PHL throws cash vs traffic jams as public transport system falters B R C | Researcher & D D. E | Editor
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First of three parts
N social media, a video of fistfight between drivers of a taxi and a truck elic-
PESO EXCHANGE RATES n US 47.5590
ited comments that ranged from acceptance of altercation during a traffic jam as the new normal to suggestions for cooler heads. Most Filipino viewers turned comical in their comments, reflecting some citizens have accepted the
government’s mind-setting stance: traffic jams are here to stay. Not everyone’s complaining, though. Car distributors and construction firms are having their respective field days, as vehicle
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HREE topics should never be discussed at the dinner table—religion, politics and why you needed to have a blood test for a sexually transmitted disease. To that list we should add the “60/40 percent constitutional foreignownership provision.” Rules are rules and the Securities and Exchange Commission (SEC) is prepared to defend its position to require Philippine Stock Exchange (PSE) securities brokers and dealers to disclose the beneficial owners of shares to maintain foreign ownership of firms in regulated industries to 40 percent. The 2015 implementing rules and regulations (IRR) of the Securities Regulation Code (SRC) is supposed to increase transparency in the dealings of stockbrokers to make sure that the “beneficial ownership” of PSE-listed companies does not violate 60/40. In fact, most shareholdings are effectively “anonymous,” where the true ownership is hidden. That is the way the stock market has always worked because to physically register ownership with paper certificates is time consuming and costly if you do not intend to own the stock until you die. C A
Classroom
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AUTHOR: ALBERTO C. AGRA
BM GRAPHICS: JOB RUZGAL
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n JAPAN 0.4200 n UK 68.1663 n HK 6.1149 n CHINA 7.2977 n SINGAPORE 33.9029 n AUSTRALIA 33.9998 n EU 52.8048 n SAUDI ARABIA 12.6841
Source: BSP (19 February 2016 )
A2 Monday, February 22, 2016
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MRT 3 buyout before May polls not possible–DOTC C A
financial institutions are very much concerned about taking a hit or a loss when we execute the amount,” Abaya said, referring to the Development Bank of the Philippines and Land Bank of the Philippines, that combined, owns roughly
80-percent economic interest in the MRT Corp. (MRTC) by virtue of bonds purchased in 2009. State officials concerned with the transaction have already met to discuss the track the government will follow to move the project forward. Abaya said he has met with Finance Secretary Cesar V. Purisima
and MRTC Chairman Tomas T. de Leon Jr. and should soon meet with President Aquino to discuss the initiative. “We are onboard as to what direction we are going to take. I’ll brief the president about it and we’re pushing through. We are filing the proper motions and pleadings before the
arbitration court,” the transport chief said. The government wants to acquire the train line from the private sector to put an end to the hellish rides commuters face on a daily basis. The takeover is enshrined in Executive Order 126 issued by President Aquino in February 2013. The
order mandates the Department of Transportation and Communications and the Department of Finance to execute an equity-value buyout of the private company that owns the MRT to free the government from paying billions of pesos in so-called equity rental payments to the MRTC every year. The takeover is key to the modernization of the railway system that ferries more than 540,000 passengers daily. Before the government can actually buy out the private partner, several steps must be taken to ensure the takeover will be smooth and consistent with global best practices and international law. To take over the line, the government must purchase all the shares and bonds of the railway company. Another requirement for the buyout is for the government and the private partner to strike a compromise, end the ongoing arbitration case in Singapore lodged in 2008 due to the state’s failure as line operator to pay billions in equity rental to the owner of the rail system. But three years into the issuance of the President’s order, the transportation and finance departments have not moved an inch in completing the buyout. The plan encountered roadblocks, including the rejection of the takeover budget by lawmakers. The government agencies are even now regrouping to find “creative” ways to execute the buyout. “What is important is that a direction is set and we move toward that direction,” Abaya said. For rail expert Rene S. Santiago, the buyout should not improve the train line one bit. “The buyout has no effect because they are just buying debt papers. It will not improve the rail system,” he said. This view was shared by MRT Holdings Chairman
Robert John L. Sobrepeña, who said the government is spending “too much money” on buying its own bonds. “We never believed that the buyout will materialize even from the beginning. They are spending too much money for nothing because they are just buying out the bonds. They never approached the private sector,” he said. The 17-kilometer mass-transit system began commercial operations in 1999, almost a decade after it was first conceived, to help decongest the capital’s main artery, the Epifanio de los Santos Avenue, or Edsa. The build-lease-transfer contract was awarded to MRTC two decades ago when it acquired the company’s original contractor following a botched agreement with the government. The 25-year contract essentially provided that the private partner builds the line, the government leases the transport system and the infrastructure will be transferred to the state at the end of the concession period. When it was built, observers, at first, thought it was a flop, as average daily ridership totaled only 40,000 passengers back then. Still, the private company that built the system urged the government to undertake expansion programs to prevent congestion in the railway line. The state, however, refused, saying the train system must first hit the 350,000-passenger mark before it does an expansion. The line hit its rated capacity after four years time, but still the government refused to approve proposals to add capacity to the system. As the years passed and the economy e x pa nded , pa ssenger count mounted and hit the crush-load point, or it’s maximum capacity. Still, the government remained deaf to the cries of both consumers and the private partner to modernize the line. At present, commuters waiting to board at the steadily deteriorating rail line grow faster than the cars could be serviced or put to use. Today, the rail line’s average daily ridership is already above 560,000. Its highest single-day passenger count stood at 620,000.
Top oil states to complete output talks by March 1
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AJOR oil-producing nations, seeking to curb a flood of supply that’s cut prices almost in half in the past year, agreed to wrap up talks on capping output by the start of March, according to Russia’s Energy Ministry. “We agreed that all consultations should be completed by March 1,” Energy Minister Alexander Novak told state TV on Saturday. Countries publicly supporting the deal export about three-quarters of the world’s crude, so it “would be a positive signal” for the market, Novak said. Saudi Arabia, Russia, Venezuela and Qatar reached a preliminary agreement in Doha on Tuesday to freeze output at January levels if other states join them. The deal’s success hinges most notably on the attitude of Iran, which has vowed to raise production by 1 million barrels a day after sanctions on the nation’s exports were lifted last month.
Iran constructive
IRAN was “constructive” on the Doha outcome, although the country hasn’t made any statements on whether it may join the pact, Novak said. Consultations with nations that aren’t members of the Organization of the Petroleum Exporting Countries (Opec) are also possible, he said, when asked about Mexico and Norway. Talks with Opec on cuts also aren’t ruled out if the market worsens, Interfax reported on Saturday, citing Vladimir Voronkov, Russia’s envoy for international organizations based in Vienna. While the Doha pact was the first coordinated action to counter an oil slump by the two largest producers in more than a decade, Saudi Arabia and Russia both pumped almost record levels of crude last month. An output freeze is the start of a process that could lead to other steps in coming months, Saudi Oil Minister Ali al-Naimi said after the talks. “We’ve worked out a common position,” Novak said, commenting on the deal. “We discussed various options, including doing nothing and cutting production.” An oil price at $50 a barrel is acceptable for exporters and consumers over the long term, he said. Brent crude, a global benchmark, traded at about $33 on Friday after dropping 45 percent over the past year. Bloomberg News
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Monday, February 22, 2016 A3
Ayala Land allots bulk of 2016 capex for residential projects, shopping malls
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YALALand Inc., the country’s second-largest property developer, said it is allotting a significant amount of its capital expenditures this year for residential projects, despite early signs that the market is slightly cooling down. Jaime Ysmael, the company’s chief finance officer, said of the P85-billion capex this year, around 40 percent will be spent for residential projects. Shopping malls projects, meanwhile, will account for 16 percent; offices, 8 percent; hotels and resorts, 4 percent; estate development, 5 percent; land acquisition, 19 percent; and the rest for other investments. “The bulk will now be completing the projects that we have started across all the business lines that we are in,” Ysmael said. Last year actual launches in terms of value for residential over all was around P80 billion, lower than the P90 billion during the previous year. “In general, we just want to make sure that we’re focused on selling [what is] available before we launch any new project. It’s been part of our risk management. We don’t launch for the sake of launching. We want to make sure that we are able to sell enough of the towers,” Ysmael said, adding that the value of launches this year may be flat.
₧85B
Ayala Land’s capex for 2016
Meanwhile, on the hotel side, the company said it will focus on developing for the provincial market. “We like the Seda brand; we like the $100 market as against the $200 market. We think the $100 market and the Seda brand will actually do much better in terms of occupancy as compared to the branded brands,” said Jose Emmanuel Jalandoni, the company’s senior vice president. Jalandoni added that the company will increase the number of its hotel room keys from 2,324 as of end-2015 to about 2,700 in the coming years, via its projects that are currently under construction. The company also said it is now “seriously” looking at industrial projects after it launched the Cavite Technopark last year. Jalandoni said Japanese locators are going back to the Philippines as it is no longer cheap to set up shop in China. “What happened to Thailand where flooding affected the value chain of many of the Japanese car companies? They’re looking at the alternatives now,” Jalandoni said, adding that they are seeing a lot of interest in its industrial estate from Japanese and local investors. Of Ayala Land’s consolidated revenues of P107.2 billion last year, the bulk came from property development at P67.9 billion, which includes sales of residential lots and units, office spaces, as well as commercial and industrial lots. Revenues from the sale of residential lots and units reached P58.4 billion, 12 percent higher than the P52.3 billion posted in 2014, driven by bookings and project completions across the company’s residential brands. In addition, reservation sales reached a total of P105.3 billion. However, Ysmael said sales from its industrial estate accounted for less than 5 percent of its revenues since the company doesn’t have inventory. “[Cavite] Technopark is almost full,” he said. Meanwhile, revenues from hotels and resorts reached P5.9 billion, 6 percent higher year-on-year due to improved revenue per available room performance of its branded hotels and El Nido Resorts.
PHL candidates grilled on poverty in debate
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HE five Philippine presidential candidates were grilled in a nationally televised debate on Sunday on how they would fight the long-pestering problems of poverty, corruption and crime that have blighted their Southeast Asian nation through several presidencies. Commission on Elections Chairman Andres D. Bautista said the two-hour debate, the first to be organized by the commission in 24 years, aimed to shift the public’s focus toward policy talk and programs to confront social ills. Voters being swayed more by personalities, patronage politics and showbiz-like campaigns have long been a concern in the Philippines, which continues to grapple with widespread poverty, Marxist and Muslim insurgencies, corruption and other major problems three decades after toppling a dictatorship via a People Power revolt. The elections commission brought back the presidential debates, which were last held in 1992, to allow Filipino voters to scrutinize the main contenders and help them “vote correctly,” Bautista said. After Sunday’s debate, held at a university in southern Cagayan de Oro city, two more will be staged in March and April ahead of the May 9 election. The candidates were asked questions on a range of issues, including their antipoverty and anticrime strategies, and how they would solve the decades-long Muslim insurrection in the south of the predominantly Roman Catholic nation. AP
A4 Monday, February 22, 2016
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PHL throws cash vs traffic jams as public transport system falters… C
Feeding the fire
DESPITE the increasing frequency of traffic jams in the metropolis, commuters turned to the basic element of a traffic problem: private cars. It’s like traffic jams are feeding itself, Isuzu Gencars Inc. Sales and Marketing Manager Ariel Raymundo told the BM. With the poor quality of mass-transport system, coupled with affordable loan packages offered by banks, it is now easier to own a vehicle, Raymundo said. “When it comes to financing, the easy loan packages of the banks are there. The all-in packages, paired with the low rates, result in easy loans for car buyers. And it makes it easy for banks to sell cars to customers, as well.” Total car sales for last year hit a total of 288,609 units compared to only 234,747 units sold in 2014, according to the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi). Campi data has revealed the increase in car sales began in 2012 at 72,871 units sold to 102,209 by 2013, doubling by 2014 and increasing by 30 percent. University of the Philippines (UP) Prof. Jose Regin F. Regidor noted that the state of traffic, coupled with the mediocre service received from public modes of transportation in Metro Manila, push commuters to buy vehicles.
288,609
Total number of vehicles sold in 2015 (234,747 units in 2014) according to the Chamber of Automotive Manufacturers of the Philippines Inc. Buying cars rid them of the inconvenience and discomfort they endure traveling every day, said Regidor, who teaches at the Institute of Civil Engineering in UP Diliman, Quezon City. “Traffic congestion does not seem to deter people from buying cars,” Regidor told the BM. “In fact, due to the bad state of rail transport and the low quality of service of road public transport, people are more motivated to purchase their own vehicle so they have control of their travel.”
Auspicious year
THE Year of the Monkey proved to be promising for the Philippine automotive industry of the country. Vehicle sales hit a total of 23,808 units in January, which is nearly double the 18,662 total units sold—a 27.6-percent growth— in the same month last year, Campi data revealed.
ROY DOMINGO
sales have increased and government road projects teemed. Both public and private sectors have found a common tool to fight traffic jams: cash.
Of the total, commercial vehicles sold in January were at 15,176 units, a noticeable increase compared to January last year with only 11,462 units sold “Sales is not limited to cars but include increased motorcycle sales,” Regidor said in an interview. “This is because people think that they can avoid or get through traffic jams with motorcycles.” Regidor attributes the increase in the number of motorcycles sold to inefficient public transportation. “Traffic jams could have encouraged people to shift to public transport,” he told the BM. “The MRT is not sufficient anymore with the increase in the number of commuters,”
Raymundo said. According to a report by the BMI Research group, vehicle sales will increase by up to double digits for the year 2016 to 2019 with an average growth rate of 31 percent for the Philippines. The report noted that private consumption and easier access to vehicle financing options will fuel consumer spending. The registered motorcycles and tricycles in the Philippines for the year 2013 reached up to 4,250.7 units. The year 2012 posted 4,116.7 units and 2011 had 3,881.5 units. As per the motorcycles owned by households, the numbers reached up to 3,957.3 units for the year 2010. In 2010 a total of 1,722.2 cars were registered, latest data from the Philippine Statistics Authority revealed. The number decreased to 828.6 by 2011 but steadily increased to 852.3 (2012) and to 868.1 by 2013.
MMDA boost
TRAFFIC expert Rene S. Santiago noted that Filipino commuters reverted to purchasing their own vehicles to avoid dealing with problems that traffic presents to them as commuters. “Traffic congestion encourages people to buy cars because getting stuck in a car is preferred over slow-moving and uncomfortable public transport,” Santiago told the BM. “The number-coding scheme of MMDA has boosted car sales, not the reverse.” Car loans have been increasing over the years, as well, according to a report by Carmudi Philippines Inc. The company noted that for the year 2014
auto loans have had the fastest increase among its other financing categories. Auto loans posted a 20-percent growth in 2014 to almost P880.969 billion. The Bangko Sentral ng Pilipinas (BSP) data also showed there was a 25-percent increase in auto financing as of March last year, compared to the first quarter of the year 2014. Consumer auto-loan financing reached P244.687 billion for the first quarter of last year, the BSP data revealed. Carmudi Philippines noted that with the rising middle-income class, the easy access and availability of financing options paired with the low interest rates make it easier for consumers to purchase cars and motorcycles nowadays. As banks offer attractive auto-loan packages with low downpayment requirements, it makes it easier and faster for Filipinos to own a car, according to Raymundo. According to him, more sedans are being bought by customers as a unit fetches for downpayment price of between P30,000 and P40,000. Public Works Secretary Rogelio L. Singson has acknowledged the correlation between vehicle sales and traffic jams. “The car and motorcycle sales continue to increase in double digits in the last three to four years, which aggravates traffic in Metro Manila,” Singson was quoted in news reports as saying. However, Singson’s Department of Public Works and Highways are not being spared from blame as its road-repair projects, especially along the Epifanio de los Santos Avenue, are pinned to instances of “ carmaggedon” in Metro Manila. To be continued
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AseanMonday BusinessMirror
Monday, February 22, 2016 A5
Thailand’s Education, ICT ministries The growth of three-color mangoes in Vietnam develop English-learning application A
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HAIS will soon be able to access free English-language courses on a mobilelearning app developed by the Education and Information and Communications Technology (ICT) ministries.
The app will be available for download within the next two months. The development is part of the government’s policy of promoting e-learning, as well as part of the state’s digital economy development. “We want to improve Thais’ English-language skills and develop their professional and career prospects in the Asean Economic Community,” ICT Minister Uttama Savanayana said. In the initial stage, state officials and people using Android smartphones will only be able to download the app on Google’s Play Store. The next phase of the app service, scheduled to be completed next year, will be especially designed for students and small and medium-sized enterprise operators wanting to learn English.
The app will be downloaded directly to Apple’s iOS devices via the App Store. Uttama said the mobile-learning app would provide a wide range of content including dictionaries with pronunciation guides, grammar learning, translation services and games. In a separate development, he said the ICT Ministry had asked TOT Plc. and CAT Telecom to submit their business plans and details by next month before being passed to the State Enterprises Policy Commission for approval. Both TOT and CAT are operating under business turnaround plans to become telecommunications network service providers instead of telecom operators. Uttama said the two telecom operators’ performances had shown significant improvement since last September.
TOT expects to return to operating profit in 2016, with earnings before interest, taxes, depreciation and amortization of 4 billion baht this year compared with a loss of 1.4 billion last year. T he e x pec ted sh a r p i mprovement stems from a planned partnership with mobile leader Advanced Info Service Plc. which will be a major revenue driver for TOT. TOT expects 10 billion baht in revenue from the partnership this year. TNS
We want to improve Thais’ English-language skills and develop their professional and career prospects in the Asean Economic Community.” —Uttama
N GIANG—Since switching to growing mangoes of three colors, farmer Nguyen Hoang Du in the Mekong Delta province here is no longer worried about finding a market for them. Instead of seeking ways to sell the mangoes, Du now just stays at home, waiting for the businesses or trade dealers that visit his property to order a large quantity of mangoes for export. The mango skin changes from green to a reddish purple when it ripens, so locals have named it the “mango of three colors.” With seeds being imported from Taiwan, this mango variety has grown popular in the Mekong Delta region over the past five years due to its large size, pretty colors and pleasant taste. The fruit is also known as the “Taiwanese mango.” The trees grow well, flowering easily and bearing fruit 18 months after being planted. Each mango weighs between 450 grams and 700 g on average, with the largest ones reaching nearly 2 kilograms. Due to flagging demand, Du and many other farmers in Cho Moi District’s Binh Phuoc Xuan Commune decided to get rid of their traditional plants and switched to growing three-color mangoes five years ago. “We should grow what the market
needs, not just what we think is good,” Du told VTC online television. “Consumers now favor the mango of three colors due to its large size and colorful appearance, even though it may not be as sweet as other kinds of mangoes,” he said. During peak season, an estimated 100 tons of mangoes are exported each day. They cost some Vietnamese Dong 40,000 per kg. Each hectare of mango trees produces some 10 tons of fruit, bringing in an average income of Vietnamese Dong 120 million per hectare per year. “The living conditions of my family have greatly improved thanks to growing this plant,” Du said. The mangoes have quickly gained favor among consumers for meeting not only their taste preferences, but also the national Good Agricultural Practice (VietGap) standards. Chairman of the commune’s People’s Committee Huynh Van Cuong said local authorities initially provided financial aid worth Vietnamese Dong 50 million to help analyze samples of land and water, and organize training sessions for the farmers to help them adapt to VietGap’s standards. The province will invest more than VND 3 billion to build refrigerated storehouses to help farmers preserve their fruits better, he said. PNA/VNS
A6 Monday, February 22, 2016
The World BusinessMirror
Editor: Lyn Resurreccion • news@businessmirror.com.ph
Cameron: Britain’s referendum on EU membership set for June 23
THE sun sets over Britain’s Houses of Parliament in London on February 2, with Big Ben’s clock tower at the center. A pivotal “in or out” referendum on Britain’s future remaining inside the European Union (EU) moved one step closer on Tuesday as British and European leaders praised new draft proposals aimed at keeping the 28-nation EU intact, and British Prime Minister David Cameron pinning his hopes of remaining inside the EU on potential reform of the bloc. YUI MOK / PA VIA AP
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ONDON—It’s been three years in the making, but a June 23 date has finally been set for the momentous “in or out” British vote on whether to abandon the 28-nation European Union. Prime Minister David Cameron vowed on Saturday to lead the charge to keep Britain part of the EU, winning the backing of most of his Cabinet and support for his “stay in” goal from political heavyweights in rival parties, including the opposition Labor Party and the Scottish National Party. “I do not love Brussels, I love Britain,” Cameron told the nation in front of his 10 Downing Street residence. He went on to say that he has concluded Britain would be safer and stronger remaining in the bloc, and that jobs would be created by maintaining open trading ties with Europe. Meanwhiles Cameron has launched a major push to win support for his call to keep Britain inside what he says is a “reformed” EU. The British prime minister plans TV appearances on Sunday to argue that his country’s interests are best served by a vote to remain in the EU in the June 23 referendum. He is opposed by Justice Secretary Michael Gove and several junior ministers. London Mayor Boris Johnson has yet to announce his stance. Cameron is challenging forces that support a British departure from the EU, dubbed Brexit, by asserting such a move wouldn’t slow the flow of mi-
grants into the country. He said any new trade deal forged with the EU if Britain left would have to include free movement of labor to meet Brussels’s demands. He said a landmark deal reached the day before with EU leaders in Brussels would give Britain more control over its future, lessen welfare payments to migrants who come to Britain, and protect Britain from being absorbed into a feared European “superstate.” Cameron said he was making good on a 2013 commitment to give British voters a chance to decide whether to remain in the bloc, which is seen by some Britons as meddlesome, overly bureaucratic, and unable to control its borders. Britain has always remained somewhat apart from the European project, preferring to keep its own currency rather than adopt the euro and declining to join the passportfree Schengen zone in place in much of Europe. The June vote will come as the EU struggles to cope with a sustained immigration crisis that last year brought more than 1 million people fleeing war and poverty to its shores. The referendum battle pits those who believe Britain is better off in a formal union with Germany, France
and other countries against those who see Britain as a proud island nation better capable of managing its affairs on its own. Treasury chief George Osborne and Home Secretary Theresa May, two senior Cabinet officials seen as possible future leaders of Cameron’s Conservative Party, voiced support for continued membership on Saturday. May said Britain’s “protection against crime and terrorism” is enhanced by its role in the EU. Early polls suggest a close vote is likely, fueled by the anti-EU sentiment that has been a constant issue in British politics for decades as the Brussels-based EU bureaucracy has grown in power and usurped some roles that were formerly in the hands of individual member-states. Much of the opposition to EU membership comes from the UK Independence Party led by Nigel Farage and from skeptical members of Cameron’s own party. The “out” campaign does not yet have a clear leader, although Farage is expected to play a prominent role. He has built his career on opposition to EU membership, but he has been unable to expand his political base and his bid for a seat in Parliament failed in the 2015 election. London’s popular and influential mayor, Boris Johnson, has not yet declared his intentions. Some believe Johnson, a Conservative, is potentially the charismatic leader the out side so far lacks. Justice Secretary Michael Gove on Saturday became the most prominent Cabinet figure to break ranks. “By leaving the EU we can take control. Indeed, we can show the rest of Europe the way to flourish,” he said.
“I do not love Brussels; I love Britain,” Cameron told the nation in front of his 10 Downing Street residence. He went on to say that he has concluded Britain would be safer and stronger remaining in the bloc, and that jobs would be created by maintaining open trading ties with Europe. That drew immediate praise from Rupert Murdoch, who controls one of Britain’s major television news operations, as well as several key newspapers. “Congratulations Michael Gove,” Murdoch tweeted. “Friends always knew his principles would overcome his personal friendships.” The outcome of the referendum is expected to influence whether Scottish political leaders, who strongly favor continued ties with Europe, seek a second referendum on whether to leave the United Kingdom. A 2014 referendum on that question saw Scottish voters reject independence after Cameron and the leaders of the Labour Party and Liberal Democrats joined forces to convince Scottish voters that breaking away would be too risky. The upcoming referendum may see a similar dynamic, with Cameron, Labour leader Jeremy Corbyn and Scottish National Party leader Nicola Sturgeon all arguing from dif-
ferent perspectives that EU membership is vital for Britain. “It’s important that the campaign to remain in the EU learns the lessons of Scotland’s independence referendum, so that it does not lapse into scaremongering and fear,” Sturgeon said, vowing that her party would make a “positive case” for staying in the EU. Most business leaders also strongly back EU membership because it greatly eases trade with European countries. President Obama has also indicated that the trans-Atlantic alliance is stronger with Britain remaining in the EU. The deal Cameron agreed upon on Friday with 27 other EU leaders protects Britain from taking part in an “ever closer union” with European nations and makes clear that Britain will not adopt the euro currency shared by 19 EU nations. Cameron says it also protects British interests and restricts British welfare payments to migrants from other EU nations. AP
Snowden would return to US with guarantee of fair trial
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ANCHESTER, New Hampshire—Speaking via Skype from Russia, Edward Snowden told an audience of supporters in New Hampshire on Saturday that he is willing to be extradited to the United States if the federal government would guarantee he would get a fair trial. The former National Security Agency (NSA) contractor in 2013 leaked details of a secret government eavesdropping program and left the country. He faces US charges that could land him in prison for up to 30 years. Snowden spoke on Saturday at the New Hampshire Liberty Forum, heavily attended by libertarians. WMUR report-
ed that forum organizers did not allow the media to video record his remarks. “I’ve told the government I would return if they would guarantee a fair trial where I can make a public interest defense of why this was done and allow a jury to decide,” Snowden told his audience. Snowden has previously spoken of making offers to the government to return home and his willingness to discuss a plea deal and even go to jail. Last year former US Attorney General Eric Holder said a plea deal with Snowden was a possibility, but Snowden told the BBC in an interview last October that he and his lawyers were still waiting to hear from the government.
Snowden’s revelations about the NSA, Britain’s GCHQ and other intelligence agencies set off an international debate about spies’ powers to monitor personal communications, and about the balance between security and privacy. Critics say his disclosures harmed the ability of the US and its allies to fight terrorism. To some, he is a traitor; to others, a hero. On Saturday Snowden said that while some of his former colleagues at the NSA and the Central Intelligence Agency were sympathetic to his beliefs concerning individual privacy and freedom, others said “the Constitution doesn’t really matter.” AP
EDWARD SNOWDEN (on the screen) waves to the crowd during a live Skype with journalist Ron Suskind (right) who was moderating conversation between Snowden and the audience at the Macky Auditorium of the University of Colorado in Boulder, Colombia, on February 16. JEREMY PAPASSO/DAILY CAMERA VIA AP
China diesel exports slide as price floor boosts domestic profit
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HINA’S diesel exports fell from a three-month high while imports surged as the government’s decision to halt fuel price cuts amid crude’s crash made domestic sales more attractive. The world’s largest energy consumer shipped overseas 730,000 metric tons (MT) of diesel in January, the lowest in five months, data from the General Administration of Customs showed on Sunday. While that’s more than tenfold the same period a year ago, exports slid 26 percent from about 980,000 tons during the previous month. Imports more than tripled from December to 150,000 tons, the highest in 10 months. China has been flooding regional markets with diesel as stockpiles of the fuel swell amid slowing industrial activity and shifting demand growth toward gasoline. The government’s decision not to cut retail prices when oil falls below $40 a barrel has made domestic sales more profitable compared with exports, according to ICIS China, a Shanghai-based commodity consultant. Brent crude, the global benchmark, closed down 3.7 percent at $33.01 a barrel on Friday. “Refiners definitely prefer to sell in local markets where margins are better, and a few traders have actually started to import,” Lin Jiaxin, an analyst with ICIS China, said before the data were released. “Diesel exports will remain subdued until March, when some teapot refineries may export some cargoes.” China more than doubled its first batch of fuel-export quotas for this year to 20.93 million tons, ICIS China said on January 6. Five companies, including four independent refiners, known as teapots, obtained a combined 430,000 tons of fuelexport licenses for the first time, it said. The nation’s net oil product exports—a measure that strips out imports—fell 76 percent in January from the previous month to 350,000 MT, the lowest since June, according to calculations based on preliminary customs data released earlier this month. The decline in net exports was also partly due to cold weather that boosted domestic demand, analysts at Citigroup Inc. including Ivan Szpakowski said in a report on February 15. Also in January, gasoline exports rose 92 percent from last year to 590,000 tons. Although kerosene shipments were 1.4 percent higher from the same period a year ago, they fell from December to 940,000 tons, the lowest since July. Bloomberg News
NIGER PRESIDENT FACES 14 CANDIDATES IN REELECTION BID
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IGERIENS began voting on Sunday in presidential elections as the West African nation fights Islamist militants that threaten three of its seven borders. President Mahamadou Issoufou, 64, who came to power in 2011, faces 14 candidates, including two former prime ministers, Seyni Oumarou and Hama Amadou, and ex-President Mahamane Ousmane. Voting started at 8 a.m. local time and ends at 7 p.m., and results are expected within five days. Issoufou is an ally of the US and France in the fight against Islamist militants on its border, including Islamic State to the north in Libya and Boko Haram to the south in Nigeria. The former mining engineer has vowed to regulate the spread of Wahhabi-influenced Sunni Islam if reelected to lead the world’s fourth-largest producer of uranium. Issoufou said he has built roads and raised the wages of government workers. The country should start exporting its crude to Chad and Cameroon at the end of next year. However, daily life hasn’t improved for most Nigeriens in the past five years and the government has failed to create jobs for the large youth population, according to the International Crisis Group, a nonprofit, nongovernmental organization. Niger is the world’s least developed country, ranking last in the United Nations Human Development Index out of 188 nations surveyed last year. About 5,200 candidates are also vying for 171 parliamentary seats. Almost 7.5 million of voters out of a population of 18 million are expected to cast their ballot. Bloomberg News
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The World BusinessMirror
Editor: Lyn Resurreccion • Monday, February 22, 2016
Trump wins in South Carolina, Clinton victorious in Nevada
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OLUMBIA, South Carolina— Donald Trump widened his lead over the Republican party’s presidential field claiming a big victory on Saturday as the contest moved into the South. Out West, Hillary Clinton beat Vermont Sen. Bernie Sanders for a crucial win in Nevada’s Democratic caucuses. Former Florida Gov. Jeb Bush, who had done poorly in the first three early Republican contests, suspended his campaign after a disappointing fourth place finish in South Carolina. Clinton and Trump’s victories put them in strong positions as the 2016 presidential election barreled toward the March 1 Super Tuesday—the multistate voting contests on March 1. “There’s nothing easy about running for president,” Trump said at his victory rally. “It’s tough, it’s nasty, it’s mean, it’s vicious. It’s beautiful—when you win it’s beautiful.” Clinton’s roughly five-point win eased the rising anxieties of her backers, who feared a growing challenge from Sanders. Trump’s strong showing in South Carolina marked his second straight
victory in the Republican primaries and strengthened his unexpected claim on the party nomination. No Republican in recent times has won New Hampshire and South Carolina and then failed to win the nomination. Ted Cruz and Marco Rubio, a pair of freshman senators, were locked in a race for second place in South Carolina. Bush and other candidates lagged far behind. “This has become a three-person race,” Rubio said of his strong finish, which with Bush leaving the race, bolsters his case that he is the candidate of mainstream Republicans. Cruz, who has run as a political outsider, harked back to his win in the leadoff Iowa caucuses as a sign he was best positioned to take down Trump. He urged conservatives to rally around
NEVADA win Democratic presidential candidate Hillary Clinton visits Harrah’s Las Vegas employees on the day of the Nevada Democratic caucus on Saturday in Las Vegas. AP
his campaign, saying pointedly, “We are the only candidate who has beaten and can beat Donald Trump.” For both parties, the 2016 election has laid bare voters’ frustration with Washington and the influence of big money in the political system. The public mood has upended the usual political order. That gave Sanders, who put up a stiff challenge to Clinton in Nevada, and Trump openings over many more mainstream candidates. In Nevada Clinton won the backing of voters who said electability and experience were important in their vote. But in a continuing sign of her vulner-
ability, Sanders did best with voters looking for a candidate who is caring and honest. She capitalized on a more diverse Democratic electorate who helped her rebound after a second-place fi nish to Sanders in the New Hampshire primary. “Some may have doubted us, but we never doubted each other,” Clinton told her cheering supporters during a victory rally in Las Vegas. “This one is for you.” She said Americans are “right to be angry,” but are also hungry for “real solutions.”
Sanders, a self-described democratic socialist, congratulated Clinton on her victory, but then declared his campaign has “the wind at our backs as we head toward Super Tuesday.” Clinton’s victory could be vital in pushing back the Sanders challenge that has been tougher than almost anyone expected. Clinton narrowly won the leadoff caucuses in the Midwestern state of Iowa, but the Vermont senator had a runaway victory in the tiny northeastern state of New Hampshire. Clinton now leads in delegates pledged to her at the Democratic Party’s national convention in July, but only has a fraction of the number needed to secure the nomination. Clinton’s win means she will pick up at least 18 of Nevada’s 35 delegates. Trump also is accumulating a delegate lead among Republicans. No candidate has shaken the establishment more than Trump. He spent the week threatening one rival with a lawsuit, accusing former President George W. Bush of lying and even tangling with Pope Francis on immigration. The Trump win drove Bush, once the front-runner, who was counting on his family’s broad popularity in South Carolina, out of the race. Bush is the son and brother of former presidents. Now the Trump victory foreshadows a solid performance in the collection of Southern states that vote on March 1. AP
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Scandals dog Bolivia’s Evo Morales ahead of referendum
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A PAZ, Bolivia—An influence-peddling scandal, involving a former lover and a deadly incident of political violence, could not have come at a worse time for Bolivian President Evo Morales. Bolivians decide in a referendum on Sunday whether to amend the constitution so Morales can run for a fourth consecutive term in 2019. Voters were about evenly split—with some 15 percent undecided—on whether to give Bolivia’s first indigenous president another shot at governing before the bombshell hit. Two weeks ago, a journalist revealed that an ex-lover of Morales in 2013 was named sales manager of a Chinese company, CAMC Engineering Co. Ltd, which has obtained nearly $500 million in mostly no-bid state contracts. Morales denied any impropriety, and said he last saw the woman was in 2007 when a child they conceived died under circumstances that neither has explained. The case deepened doubts about the integrity of Morales’s governing Movement Toward Socialism, which has been dogged by scandal. Adding to Morales’s woes were last week’s asphyxiation deaths of six municipal officials in El Alto, the teeming city adjacent La Paz run since last year by an opposition mayor. Pro-Morales forces are accused of setting the fire that provoked the deaths, sacking the building where the slain officials worked and torching documents that allegedly incriminate the previous mayor in payroll corruption. AP
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Monday, February 22, 2016
The World BusinessMirror
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5 years after quake, New Zealand city’s heart still missing
IN this February 26, 2011, file photo, a relief worker walks past the earthquake-damaged Christchurch Cathedral in Christchurch, New Zealand. Five years after the devastating earthquake, the ravaged city center is still largely an empty core, and it’s unclear how long it will remain that way. The Christchurch Cathedral, the city’s best-known building, has come to symbolize the quagmire. The Anglican church decided it was too badly damaged to rebuild and began demolishing it. But that work was stopped after preservationists took legal action, leaving the building’s fate in limbo. AP
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WIDOW Maureen McCarthy Scalia (center) and other family members walk behind the casket as it is ushered out of the basilica following the funeral mass for the late Supreme Court Associate Justice Antonin Scalia at the Basilica of the National Shrine of the Immaculate Conception in Washington on Saturday. AP
Supreme Court scuffle triggers constitutional clash
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ASHINGTON—It only took one man’s death to give Congress an opening to extend its dysfunction to the rest of government. Republican opposition to letting President Barack Obama replace the late Justice Antonin Scalia quickly sparked a constitutional clash over the president’s right to fill Supreme Court vacancies. Democrats, who have their own history of boxing out Republicans over court nominees, are up in arms, but begrudgingly concede that Obama’s pick is unlikely to be confirmed. So as both parties prepare for political brawling, the eight remaining justices could spend the next year hearing critical cases alongside an empty seat, unable to break a tie in the event of a 4-4 split. The standoff raises a scenario that Washington long has dreaded: that bitter partisanship in Congress, mixed with the tactics of obstruction, would eventually jeopardize the basic ability to function of another branch of government. “If Republicans do what they suggest, I think we’re headed not only for a constitutional crisis but also for big problems for the legislative process,” said Jim Manley, a former aide to Senate Democratic leader Harry Reid. “This is the natural reaction to the continued Senate
breakdown we’ve seen for years.” Supreme Court nominees have been rejected before. Yet, Democrats accuse Republicans of taking obstructionism to a new level by insisting Obama not even name a nominee with 11 months left in his term—and refusing to hold a confirmation vote if he does. Though the Constitution is clear that it is the president who nominates, Republicans say the Founding Fathers never required the Senate to give a vote. With a vast majority of Americans already disillusioned by Congress, the White House hopes the Republican gambit will backfire. “It’s a little bit like saying, God forbid something happen to the president and the vice president, ‘We’re not going to fill the presidency for another year and a half,’” said Vice President Joe Biden, who attended Scalia’s funeral Mass on Saturday. Republicans are unimpressed by those appeals to the Constitution. After all, many of the leading cases now before the Supreme Court question Obama’s unilateral actions. Opponents argue Obama exceeded his legal
authority with climate change and immigration policies that he tried, but failed, to persuade Congress to enact. “There is a significant portion of the country that watches the pretty egregious constitutional liberties the president has taken over the years and views with a sense of humor his newfound respect for the document,” said Josh Holmes, former chief of staff to Senate Majority Leader Mitch McConnell. The prospect of a protracted Supreme Court vacancy sounded alarms for those who worry that congressional gridlock will ultimately grind government to a halt. Three years ago, a quarrel over Obama’s health-care law led to a partial 16-day government shutdown. Obama has faced repeated nail-biting moments in which it appeared Congress might allow the US to default on its debt or refuse to fund the government. Obama acknowledges that he and his party aren’t blameless. The White House says Obama regrets that when he was a senator, he supported using a procedural maneuver to block a vote on Samuel Alito’s nomination to the high court. Alito was confirmed anyway. Less than three years ago, when Democrats ran the Senate, they changed practices so that the minority party couldn’t use Senate rules to block presidential nominees for key appellate judgeships. The change, which did not apply to
Supreme Court picks, was accomplished without a single Republican vote. Infuriated Republicans warned that Democrats would lose Senate control sometime and regret that they had trampled on the minority’s rights. Obama and his aides have said he will nominate a qualified candidate who can win Republican support. But to overcome procedural roadblocks, Obama would have to peel away 14 Republicans, and that feat looks impossible now. Former Democratic Sen. Bob Kerrey said that in past confirmation tussles, power was concentrated in the Senate Judiciary Committee, where the Republican and Democratic leaders worked closely together. Since then, power has shifted to Senate leaders, he said, making the process more ideological and conflicts harder to resolve. “For the next president, it will be, ‘Well, is it 11 months? Fifteen months? Eighteen months?’ If someone announces they’re going to leave the Senate, do they lose the right to vote?” Kerrey said. “You can argue, ‘Well, let’s let the people decide.’” But Sara Fagen, President George W. Bush’s former political director, said Senate Republicans would pay no political penalty. “The Republican base doesn’t want a liberal justice, and they’re completely fine with the court having a vacancy for as long as is required to get a justice they believe is right,” Fagen said. AP
Protests planned across US to back Apple in battle with FBI
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AN FRANCISCO—Protesters are preparing to assemble in more than 30 cities to lash out at the Federal Bureau of Investigation (FBI) for obtaining a court order that requires Apple to make it easier to unlock an encrypted iPhone used by a gunman in last December’s mass shootings in Southern California. The protests organized by the Internet rights group Fight for the Future are scheduled to occur on Tuesday outside Apple stores
in the US, the UK, Hong Kong and Germany. The US protests will be in cities scattered across more than 20 states, including in New York, Chicago, San Francisco and Washington, where protesters plan to express their discontent outside the FBI’s headquarters. The gatherings will come a week after the FBI went to court to force Apple to weaken the security built into most iPhones to help a terrorism investigation in San Bernardino, California. The FBI wants Apple
to remove a feature that erases the information stored on an iPhone after 10 unsuccessful attempts to enter a password, preventing unauthorized users from accessing the device. The iPhone that the FBI is trying to examine was used by Syed Farook, who, along with his wife, killed 14 people last December. Apple is fighting the court order issued in the case, arguing that the special software sought by the FBI could be used to break into millions of other iPhones. The FBI contends
Apple is exaggerating the security risks of complying with the court order in a marketing ploy aimed at selling more iPhones. Fight for the Future believes Apple’s concerns are warranted and is hoping the protests will persuade the Obama administration to take a stand against the way the FBI is trying to break into Farook’s iPhone, said Evan Greer, the group’s campaign director. The White House so far has stood behind the FBI in its battle with Apple Inc. AP
HR ISTCHURCH, New Zealand—Five years after an earthquake in Christchurch killed 185 people and destroyed hundreds of buildings, some residents have taken to calling it the “Donut City.” The ravaged city center is still largely an empty core, and it’s unclear how long it will remain that way. Bickering and uncertainty have stalled rebuilding efforts, which some property owners now view as a lost cause. Grass pokes up from fenced-off walkways. Damaged buildings sit abandoned and tagged with graffiti. Christchurch’s iconic Anglican cathedral is a crumbling ruin with an uncertain fate. Since the 6.1-magnitude quake struck on February 22, 2011, thousands of residential homes have been repaired and most of the city’s infrastructure has been fixed. Many suburbs are thriving. In the heart of Christchurch, the central government has promised to help build several large, so-called anchor projects, including a covered sports stadium and a convention center. Those plans have actually complicated rebuilding, however, because of concerns about their timing and viability. Christchurch Mayor Lianne Dalziel said that until there’s more clarity, some investors looking to build hotels or offices are holding back. “There are elements of the central city which have left rather a large gap until we know exactly what’s coming,” she said. The central government says the projects are on track, and that it will make more announcements about them in the coming months. In other cases, rebuilding has been held up by insurance disputes. A report last week by New Zealand’s central bank estimated insurers still need to resolve 20 percent of claims, and that the pace of settlement has been slower than in Japan and Chile, which also suffered major quakes at about the same time. “The reconstruction of commercial property has yet to begin in earnest, many of the anchor projects...remain uncertain, and many insurance claims have yet to be settled,” the report concluded. “When faced with uncertainty about the future, businesses are reluctant to invest and employ.” Indeed, some have given up. Cristo Ltd., one of several fami ly-r un companies t hat owned downtown buildings before the quake, has decided to sell most of its Christchurch land and invest instead in the country’s largest city, Auckland. Director Stephen Bell said his company worked for nearly a year on a replacement design for one of its buildings that was destroyed in the quake, but couldn’t find a single interested tenant. “We’re very disappointed we
couldn’t contribute to rebuilding the city,” he said. “But we’re not prepared to throw our money away on lost causes.” He said the atmosphere in downtown Christchurch is dead, which he puts down to bureaucratic red tape, the uncertainty around the convention center and planning decisions such as favoring cycle lanes over parking spots. He said some businesses that moved to the suburbs after the quake will likely stay there. “In the modern business environment, you don’t need to meet people face-to-face so much,” he said. “Some people will want to get back to the central city, for appearances, but others will decide that their business works quite well in suburban areas.” The Christchurch Cathedral, the city’s best-known building, has come to symbolize the quagmire. The Anglican church decided it was too badly damaged to rebuild and began demolishing it. But that work was stopped after preservationists took legal action, leaving the building’s fate in limbo. Despite the holdups, there are signs of life in the city center. A new children’s playground opened last December, the city’s art gallery fully reopened this month, and some newly constructed buildings have drawn praise for their designs. A makeshift shopping mall made from shipping containers has become a city feature. Others are making use of the open spaces. An agency called Gap Filler has completed dozens of projects from large art installations to the Dance-O-Mat, a coin-operated dance floor that moves about the city. The idea is to try to make the downtown more colorful and interesting. Rachael Welfare, the agency’s operations director, said the earthquake has changed the once-conservative city, which now embraces events including a street-art festival and a night noodle market. “We’re becoming this massive hub of creativity and culture,” she said. Jane Taylor, who suffered severe spinal injuries during the quake when part of a mall façade collapsed on her, revisited the downtown site this month with The Associated Press. “I think it will be a vibrant, exciting place,” she said. “But I do think that’s probably about five years away, before it’s near finished. Because although there is a lot going on, there’s still quite a few empty plots. So there’s a lot still to do.” One more factor complicating the rebuilding: More earthquakes. Christchurch experienced one of its biggest since 2011 just last week, when a 5.8-magnitude earthquake struck east of the city. It knocked items from shelves and triggered rock falls but didn’t result in major damage or injuries. AP
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The World BusinessMirror
Monday, February 22, 2016
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dead in protests for caste Most suspects freed in Indonesia 6benefits in northern India raid as tough law still pending N
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AKARTA, Indonesia—Indonesian police on Sunday released most of the men detained while attending military-style training at a suspected jihadi camp, as officials lamented weaknesses in the current antiterrorism legislation due to be significantly strengthened following last month’s deadly attacks in Jakarta. The elite antiterrorism squad early Saturday detained 38 men at a suspected militant camp on the remote slopes of Mount Sumbing in Central Java province, said provincial police spokesman Col. Liliek Darmanto. Police seized air
rifles, knives, and jihadi books and flags in the raid. However, they were released early Sunday after 24-hour questioning as police were unable to prove a string of terrorism-related allegations, he said.
“ This is the weakness of our laws,” said Saud Usman Nasution, head of the antiterrorism agency. “We cannot arrest before they have committed a crime even though we can detect a radical network.” His agency has been pushing the government to strengthen the antiterrorism law. It gained momentum following the January 14 suicide and gun attacks in Jakarta, which left eight people dead, including four of the attackers. In response to the attacks, Indonesia’s government submitted a new antiterrorism law to parliament this past week. The draft bill, obtained by The Associated Press, says an individual suspected of plotting to carry out an act of terrorism could be detained for up to six months without charges. If approved, it would be the first
time for such a tough measure to be enacted since the downfall of dictator Suharto in 1998. Luhut Pandjaitan, a Cabinet minister in charge of security and political affairs, said he expected lawmakers to pass the revisions within the next two months. The bill would also become an offense for Indonesians to join a militant group overseas such as the Islamic State group, or recruit others, with a maximum imprisonment of seven years. It would also authorize the antiterrorism squad to execute raids and arrest suspects for interrogation based solely on intelligence reports. In addition to the Central Java raid, five other suspected militants were captured late Friday in Malang, a hilly city in East Java province, said local police chief Lt. Col. Yudho Nugroho. AP
EW DELHI—Hundreds of Indian security forces imposed a curfew and were ordered to fire without warning in a bid to quell protests by members of an underprivileged community demanding government benefits in a northern state, where at least six people have died in clashes, officials said. The violence raged for a second straight day on Saturday and protesters burned several railroad stations and attacked shops and vehicles in several towns in Haryana state, police officer YP Singhal said. Protesters also blocked highways linking New Delhi to key northern cities, he said, adding that authorities ordered police to fire without warning at those instigating violence. The protesters are members of the lower-caste Jat agricultural community, who are demanding benefits both at the federal and state levels, including guaranteed government jobs or university spots. Talks on Friday between
community leaders and state government representatives failed to lead to an agreement. Authorities used helicopters to bring in army soldiers to the worst-hit districts of Rohtak, Bhiwani and Jhajjar, where curfews were in place, Singhal said. Five more towns were put under curfew later Saturday to prevent the violence from spreading. Four people were killed in clashes with security forces, Federal Rural Development Minister Chaudhary Birender Singh said. Police said at least 78 others have been injured since Friday. The Press Trust of India news agency quoted a Haryana state government statement as saying that two more protesters were killed when security forces fired at them as they tried to torch vehicles and shops. The statement said the protesters also fired at security forces and attacked them with sticks and stones on Saturday. Press Trust said five protesters were fatally shot by security forces on Saturday and one on Friday. AP
Tourism&Entertainment BusinessMirror
A10 Monday, February 22, 2016
Editor: Carla Mortel-Baricaua
Northern region’s natural wonders and cultural adventures up close
NATALNA Restaurant
HOTDOGS at Kahuna Resort
B L S. M Photos by Martin San Diego
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First of two parts
AKING up one Sunday morning had me searching for the majestic view of a sunrise by the beach. It then dawned on me that my six-day sunrise hunting had just ended.
LA Union art
LU BBQ
I just came back from our little journey to the north, a region that promises clean air, smooth roads and picturesque landscapes. Bidding goodbye to Pangasinan and La Union, my heart felt heavy like lead. I will have to wait for my next trip before I could say “hello” to the sun and say “good night” to it, while waving “hi” to the moon and the stars of the clear northern sky. We started the trip off early, as Manila’s busy Monday morning had us praying that we could do everything in our jam-packed itinerary. We crawled through Edsa via Victory Liner’s bus, and traversed the North Luzon and Subic-Clark-Tarlac Expressways. The bus arrived at Natalna Restaurant just in time for a lunch by the beach. Closing my eyes for a while, while I savor the chill from the early summer breeze, I glided through the thought of peace and quiet. The waves of the ocean were serene, but I was still able to hear its waves whisper to me: Keep calm and savor the harmony of the soothing sound of the sea. The restaurant, aptly called Natalna, a word that pertains to calmness and peace, is nestled at the heart of San Fernando in La Union. It is a quaint restaurant with a rustic interior, but guests have the option to eat outside to marvel at the view and enjoy the sound of the ocean. We were served a variety of Ilocano dishes, including tuna, squid, barbecued pork and their very own taco
salad—this particular one is a wonder. Flavor-wise, the food was really great, perfect enough to fill hungry tummies from hours-long drive. We then headed to the city proper to feast our eyes and minds with art. Exhibiting the works of local artists in the province, the La Union Art Gallery aims to foster and promote the arts birthed by locals. One such artist in that quaint art gallery struck me the most: Rodel Rillera. His works mostly involve the use of medical injection to paint a canvass with patterns. Thick dabs of paint birthed a magnificent textured work, the paint embossed on the canvass. Rillera leads the pack of artists in La Union and says that he hopes that the art gallery could sharpen more creative minds to further promote the art scene in the province. After a tiring day, we proceeded to check-in at the Kahuna Beach Resort, a high-end seaside retreat in San Juan, La Union, which promises huge waves and scenic views, perfect for photography junkies. On shore, we staged a bonfire and helped ourselves with roasted marshmallows and hot dogs, paired with ice-cold beer, while waiting for the sun to set. This spot is perfect for a quiet time with friends, who can share with your epiphanies in life. The first day of this sojourner’s trip did not end with these realizations, as our group headed to the famous grill aptly called LU BBQ. This might be the best barbecue place
PLANET G
there is in La Union. It offers various types of grilled meat—including burger siders—that will surely make renowned chef and restaurateur Gordon Ramsey praise the cooking and the taste of the dishes. It is also home to various works of art, where local singers jamming with the crowd are a staple sight. During our trip, students from the local college performed spoken word poetry, a form of art that combines
oration and free-verse poetry. It is fairly new in the Philippines, and local artists—especially masters of the pen—are encouraging young artists to step-up and play with the art. We dozed off after a busy day to prepare for our adventure at the Tangadan Falls in San Gabriel, La Union. Going to the falls requires a bit of an effort. We drove to the local government’s office to secure our permits and hire a guide. We also had to
hire a jeepney to get to the site. It was my first time to ride the jeepney topload style, not minding the heat of the sun. As the gentle summer wind brushed through my face, I kept a firm grip on the vehicle’s handles to keep myself safe from the dangers of the winding road. The view from the top, while traversing the road, was majestic—unadulterated forests, mountains with pigments of green and dense plantations paint the scenic view of the road to San Gabriel. When we arrived, we hiked for about 20 minutes to the falls. The trail was not tiring and the landscape of the path was enthralling, the leaves dancing with the subtle wind. Large rocks greeted us and the voice of the waterfalls came thundering with every drop to the clear lagoon. The 40-foot cascading body of water welcomed us with calm and clear waters. I tried to dip my foot in the water to test its temperature. It was cold, but bearable. I begged off wearing a life jacket and started swimming my way to the middle and floated like a lily on a calm lake. Closing my eyes, I started to wonder how many people know about this gem. Our tour guide tells me that only a few down south, but a generous number up north. After an hour of playing with the waters, we hiked back up to where our jeepney was parked. My feet were begging to rest, but the hike was really satisfying— beads of sweat swam across, my legs aching. My friends and I climbed up again to the top of the jeepney and, boy, the view going down was more majestic. We arrived at the provincial hall, and immediately went to the Cube-
O Restaurant in Bacnotan for our lunch. A very unique concept restaurant, Cube-O serves traditional Ilocano dishes on a cube that is enough for about four to six hungry stomachs. After getting our tummies filled, we went straight to the La Union Bee Farm to witness how honey is made. We were able to try pure honey straight from the comb by “fingering” it. It was amazing to learn that the bees in the farm help cultivate the nearby corn plantations in the area. The farm also advocates the proper care for honey bees and produces different products—from soap to wine—out of honey. Exhausted from a hike and the culinary joust with friends, we checked in to La Roca Villa in San Juan, which resembles the Greek city of Santorini. After freshening up for a bit, we headed to have dinner at Mommy Lu’s, a decadeold restaurant that started as a catering business. Inside, the restaurant looks like a traditional Filipino-Spanish house. Pictures of the owners and their children plastered the walls, a grill was set up inside, and tables were set to resemble the home setup. I wished for a second that my parents were with me to enjoy the moment. I decided to savor the hour before we headed back to San Juan to try the local bar crawl. For the first time in my life, I hopped from one bar to another. We started with Two Monkeys, a simple burger place that only offers two options: An order of burger or a serving of fries. We stayed there for about 30 minutes and had the chance to chat with the owner—surfer who left his abode in Manila and moved into San Juan. Sitting al fresco with very little noise while chatting with friends has always been my preference. This pub is perfect for me, I think. We then headed for Surf Shack, a place perfect for millennials who like to chill with a live band playing, while drinking craft beer or shooters. We were served two different types of pizza—one tasted like the sea, paired with locally produced honey. Heaven was real at that moment. By the time I was on my fourth bottle, we moved to our last stop: Planet G, a hospitality group of restaurants, hotels and bars. The bartender showed us a neat trick of using fire to spice up cocktails. He stacked up about five layers of glass and poured liquor in it and lighted it up. A pair—a friend and I volunteered—should immediately sip the drink to avoid accidents. After a night of binge drinking, we dozed off and woke with a start— we have to start early to arrive in Pangasinan in time for a quick lunch and a day of adventure at the Balungao Adventure Park.
Tourism&Entertainment BusinessMirror
Editor: Carla Mortel-Baricaua
Monday, February 22, 2016
A11
A DAY ON A DAIRY FARM L B E V. D
AGUNA is one of the provinces closest to Metro Manila that is known for its hot springs, mountainous ranges and resorts, however, in its midst lies a peaceful and quaint dairy farm that produces cheese, yoghurt and one of the best ice creams in the market today. Carmen’s Best ice cream, the artisanal ice cream served as dessert to the pontiff during his visit to the country last year, is produced daily in Laguna using fresh milk. “This started just as a hobby. I’m actually more of a city guy, but when I realized the potential of this dairy farm, I grabbed the chance of working in a farm and I love it,” the owner Paco Magsaysay said. Since it was my first time in a dairy farm, I was quite excited and looking forward to what was in store for me. On the road, we actually had our first taste of Carmen’s Best. I had the salted caramel variant and it was pure, heavenly thing to taste; that’s one treat that is really thick and creamy.
Real and fresh dairy farm
AFTER more than an hour of travel, since we got lost along the way, we
finally arrived at Real Fresh Dairy Farm, a 27-hectare land that’s quite bare except for the grazing cows munching on some grass. We were told that there are around 264 cows, 100 of which are called “milking cows” and a bull. And if one of the cows happens to give birth to another bull, Magsaysay and his team sell them. These farm animals are kept healthy and are often screened for tuberculosis and other types of illnesses. According to Magsaysay, the farm produces at least 1,500 liters of milk every day, 20 percent to 30 percent of which are used for producing Carmen’s Best ice cream, which, incidentally, is named after the owner’s daughter, Carmen. “We milk the cows at around 4 a.m. and 4 p.m. every day when the climate is cool and temperate so that the cows
won’t get stressed,” said Jake Borja, farm operations supervisor. “We follow a strict 12-hour interval in our schedule. The cow milking becomes more efficient when the light is dim and there’s classical music in the background which soothes and relaxes the cows even more.” The heat was quite intense that day so we tried to cool down in a small hut but our group was promptly led to the processing plant where we saw lots of milk kept in silver buckets. Inside are four quadrants or cubicles where four cows are able to give at least 10 to 14 litres of milk a day. “In other countries they produce an average of 35 to 40 litres a day, but, of course, they are much bigger animals,” Magsaysay said. Borja added that “the process is complex and you can just imagine the expenses that we incur every day, but it is rewarding because you can easily get the milk. It is just a matter of being efficient and utilizing all the resources we have.” The cows stayed put in their places and we just observed them from afar. As much as we wanted to get close to them, we were told that the cows get stressed when they see strangers so it is better keep a safe distance.
The preparation stage
WHEN we left the processing plant, we visited the preparation area where milk gets analyzed, stored, and processed into the desired products. There are around four rooms and the workers all looked working
REAL Fresh Dairy Farm owner Paco Magsaysay is most happy when he is at his farm.
hard at their stations. “The first test that we do is to determine the acidity of the milk,” Borja said. “This is important because the test determines the shelf life of our products. If you have high-value acidity, your product won’t last very long. Our standard shelf life is 10 days but in the summer months, it is around seven days.” Magsaysay added that “if the milk is too acidic, we won’t let it go to waste and, in-
stead, we turn it into cheese.” After going through all the rooms in quick strides, we were then led to a resting area, but the best is yet to come. Finally, we were then given the chance to dip into the readymade products at hand. I found it divine especially the yoghurt that’s creamy and quite thick. I am not really a fan of yoghurt—I never was— but with Carmen’s Best, it made me really crave for more. I enjoyed ev-
ery scoop I can get out of the cutesy bottle that is really a keeper. Afterward, we were also treated to lunch. The whole trip was quite a pleasant experience, having been introduced to the complexity of milk production and its byproducts. But if there’s one thing I wanted to do at Real Fresh Dairy Farm but never had the opportunity to do so is to milk the cows by myself. Yeah, that would be the day.
A12
Science Monday
Monday, February 22, 2016
BusinessMirror
Editor: Lyn Resurreccion • www.businessmirror.com.ph
Soccsksargen invention contest winners announced
DEPARTMENT of Science and Technology Soccsksargen Director Bai Dr. Haja Shayma Zenaida P. Hadji Raof Laidan (left) gives the award to Chris John Perenal, college researcher and recipient of the Sibol Award Outstanding Student Creative Research for College, together with his adviser, Mary Lynn Magbanua. The winners are from Sultan Kudarat State University.
ENGR. Leo M. Almazan (second from left) receives the DOST-BSP award from Science Undersecretary Amelia P. Guevarra (left), DOST-Philippine Council for Industry, Energy and Emerging Technology Research and Development Executive Director Carlos Primo C. David (third from left) and Philippine-Microsatellite Program Team Leader Joel S. Marciano.
BALIK SCIENTIST AWARDED FOR CONTRIBUTIONS TO PHILIPPINE SPACE SCIENCE
Space science? PHL is inching there S J D A | Special to the BusinessMirror
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O you want to use an amateur satellite station? The Philippines has one now. It is housed at University of the PhilippinesElectrical and Electronics Engineering Institute (UP-EEEI) Room 529. Students can use it to communicate with any satellite that passes above the vicinity of the country up in the sky. Space scientist Engr. Leo M. Almazan set up the amateur satellite station. The Department of Science and Technology (DOST), under its Balik Scientist Program (BSP), recently awarded Almazan for his contributions to the advancements of the country’s space studies, which took Filipinos into another mileage of research and explorations. “The DOST-BSP award is another milestone in my career, as I’ve been in this business for 40 years. The reason I came here is to share my experience and my advice to my alma mater,” Almazan told the BusinessMirror in an interview on February 17 at the UP-EEEI during the awarding ceremonies. Hailed as one of its outstanding overseas Filipino scientists, Almazan noted on his exit presentation that the foundation of his success roots back from his days in the school—and now he’s back to impart some of his knowledge to the coming generation. A former ser viceman of the US Nav y who also ser ved the Space and Naval Warfare System Centre Intelligence Office Division as a project engineer, A lma zan reminisced t hat he used to go to UP in elementar y until the first year of his secondary education. He then went to the US, where he finished his Bachelor’s in Electronics Engineering degree in San Diego State University (SDSU), with Master in Electronics Engineering, also in SDSU; and Master in Engineering Management in West Coast University. With expertise in military intelligence, radio frequency, systems design, and installation and management, Almazan was hosted by the UP-EEEI for the short-term expert category of the DOST-BSP. As a recipient of the award, Almazan is performing his term, which
runs from January 15 to April 21, to design, build, test and launch a series of nanosatellites; build a ground station; and develop spacescience curriculum as electives for graduate students. The setting up of the amateur satellite station at the UP-EEEI was part of his tasks. The ground-station equipment can be used to provide emergency communication during disasters. “Now, we don’t need to have a big and expensive facility, because we already have our own microsatellite that can be used by the students. They will be able to know what’s out there,” Philippine-Microsatellite (PHL-Microsat) Program leader Joel S. Marciano Jr. said.
Philippine Space Agency
IN his presentation, Almazan said the Philippines needs to create its own space-focused agency that can help the country with its commercial, military and scientific use. “The Philippines needs to have its own national space agency that only focuses in space program. But how do we sustain that? We need to have an actual space agency that will be manned by the government, the people, academe and, most especially, the military,” Marciano said. The DOST is inching closer in forming its very own Philippine Space Agency, to which the PHLMicrosat Program, or Diwata-1—the first-ever Filipino-made microsatellite—is a vital part of. “The PHL-Microsat Program is one of our moves toward the establishment of our own space agency. This is capability-building; for us to be able to sustain the agency, we have to have our own people first,” Science Undersecretary for Research and Development (R&D) Amelia P. Guevarra said. She added: “We have nine engineers in Japan who developed
the Diwata-1 with the help of two Japanese universities. Hopefully, these students will work here and be the ones who will be there for the space agency. But, unfortunately, there is also a possibility that they will be pirated outside the country, because what they are taking is a very specialized field.” R&D is also a vital requirement for a space program, as researches linked to disaster-risk management, climate change, and resource assessment of our forest and ocean will be the basic applications of a space agency. “That is very complex and wide scope for R&D. And scientists and engineers are the people we expect to do it. So, we train people,” Guevarra lamented. For the Philippines to accomplish that, Almazan noted that government and experts from variety of fields involved should join to build its first amateur satellite station to train students and researchers. “Training starts in school by giving them resources, like CDs and videos, showing how amateur radio communication works. If we train the students in an early stage on how to handle this kind of equipment, they will be encouraged to push through in becoming an engineer,” he said. He added: “Another important thing is educating the students on how to troubleshoot the equipment if needed. This is the very important thing in dealing with radios and tools in the lab.” Marciano, on his part, said there are many amateur radio enthusiasts in the Philippines. “All we need is to reach a younger group and provide them a venue where they exercise practical and hands-on communication with satellites. We really want to spread this capability all over the country,” he added.
Diwata-1 and Diwata-2
THE DOST collaborated with the prestigious Hokkaido University (HU) and Tohoku University (TU) in Japan for the construction of the Diwata-1, which will be orbiting the Earth in April. “But it can be moved depending on many factors, like weather and technical issues,” Marciano said. The team, which was composed of nine Filipino scientists—seven UP engineering students, who were also taking their postgraduate studies in Japan; and two DOST science researchers—with the help of HU and TU professors and students, already handed the satellite to the Japan Aerospace Exploration Agency
(Jaxa) in Tsukubaka, Japan. The Jaxa turned over the microsatellite to the National Aeronautics and Space Administration (Nasa), too, for final examination of the satellite before it will be deployed into orbit from the International Space Station. The 50-kilogram Diwata-1 is equipped with high-precision telescope for capturing the damages brought by natural calamities; space-borne multispectral imager for observing the vegetation, agricultural growth, ocean and forest productivity; wide-field camera for the monitoring of weather and cloud patterns; and middle-field camera in defining the specific place of where the images are captured. On the other hand, the Diwata-2 is now being developed in Japan with the same PHL-Microsat team and universities, and is set to launch on the last quarter of 2017 or first quarter of 2018. It will have more sensors and cameras, and will orbit on a higher atmosphere above the Earth. Both Diwata-1 and Diwata-2 have a life span of orbiting for 18 months and will pass the Philippines every 90 minutes. “It will have a same orbit of 18 months. The reason it is only good for that time span is because there are so many cosmic rays and debris within that atmosphere that will eventually destroy the satellite,” Almazan said. Meanwhile, the difference of Diwata-1 with Diwata-2 is that Diwata-1 will be 400 km above the ground, which gives the microsatellite a smaller footprint that will provide ground stations access to its data for only 10 minutes to 20 minutes. Diwata-2, because of its higher altitude, will have a much bigger footprint and its communication purposes may take about half an hour. “Also, anyone with license could talk to anybody along that [Diwata-2] footprint just through the satellite. It could be 1-[minute] to 4-minute window that depends on what antenna will be used,” he added. On the other hand, the Philippine Earth Data Resources Observation station, also known as Pedro, handled by the Advance Science and Technology Institute, was established in Subic, Zambales, to access, receive and store data by Philippine microsatellites. The budget for the two microsatellites is P800 million for three years. “The budget is to fund the university here, the people involved in the microsatellite program, the launch of the microsatellites, building research facility, and training students and researchers,” Marciano said.
CYRIL KENT GABIO (right), high-school researcher and recipient of the Sibol Award Outstanding Student Creative Research for High School Students, is with his adviser, Jessalyn Leonor. They are from Isulan National High School. They are demonstrating how their research on electro feeder as automatic poultry-feeder regulator can feed chickens by just one text from a cell phone. S S T
Special to the BM
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HE Regional Invention Contest and Exhibit (RICE) is a venue where both public and private-sector researchers and investors compete for the best invention and research project. It has been creating opportunities for scientists and researchers, both professional and students, to showcase their creativity and inventiveness. This year in the Soccsksargen region, headed by Regional Director Bai Dr. Haja Shayma Zenaida P. Hadji Raof Laidan, two groups from more than a total of 76 entries were awarded the Outstanding Student Creative Research for high-school students and Outstanding Student Creative Research for college students, or Sibol Awards. Both groups would later compete in the National Invention Contest and Exhibits (NICE) for the Presidential Awards for Inventions in July.
Sibol Award for high-school students
THE qualifier for DOST Region 12 creative research for high-school students came from Isulan National High School. Cyril Kent Gabio, Grade 10 student, together with his adviser, Jessalyn Leonor, thought of a way on how to automatically feed chickens through a single text from a cell phone. The research, entitled “Electro Feeder as Automatic Feeder Regulator” uses a cell phone to send a text and automatically command the feeder to dispense chicken feeds. “We used the cell phone to send the command and a propeller to evenly dispense feeds so that chickens inside the farm can eat,” Gabio said in an interview with the BUSINESSMIRROR. Using only a vibrator for the dispenser to work, the high-school researcher aims to help farmers when they leave their chicken farms unattented. “This invention and research can help people, especially farmers who are busy or who are out of town. They won’t need to go back to their farm to manually feed their chickens. They can use their phones to automatically dispense chicken feed from the feeder,” Gabio explained. His adviser helped Gabio finish his research. The research was initially a project done by her students and eventually Gabio modified the project to make it work and look fit for the contest. When asked what preparations they will do for the 2016 NICE, Leonor said, “We will ask for advice and recommendations from the judges on how to improve our device.” Gabio added, “I’m very happy and excited. I will do the recommendations given by the
judges to modify my research and to further improve my automatic feeder.”
Sibol Award for college students
THE search for strong and durable materials as substitute for lumber is still a challenge for many researchers in this field. This is because most materials used for lumber replacement still results in a lack of strength and durability when it comes to stress, shrinkage and water absorption. This is still a hurdle in the furniture industry. Yet, for Chris John Perenal of Sultan Kudarat State University, together with his adviser, Mary Lynn Magbanua of their Civil Engineering Department, their research on the oil-palm trunks to be used as lumber has given them a chance to showcase the potential of this agricultural byproduct. In an interview with the B USINESSM IRROR, Perenal said, “The oil-palm tree becomes an agricultural waste after 25 years. So we thought of investigating its physical and mechanical properties.” He added that the benefit of this research is to make an alternative material for the production of wood. “We can utilize this tree as an alternative wood for small applications in lumber such as furniture.” As for his adviser, Magbanua said that her goal for this project was not just to create new materials but also to save the environment. She said, “There are two benefits that I think are beneficial to our environment. The first is no more cutting of trees and the other is to stop the burning of agricultural products.” She also wants to help the local economy through creating jobs when the research is patented and made into an entrepreneurial venture. The research can be a substitute for wood for furniture production, panel boards, table tops, ceiling or partition wall. Perenal also plans to put further tests and for wood tiles. The winning teams did not only receive a trophy each but also a P20,000 cash prize at an awarding ceremony held at the KCC Convention Center in General Santos City on February 18. They will proceed to the national competition, NICE awards in July. There were no winning teams and qualifiers in the other categories such as the Likha (Outstanding Creative Research) and the Outstanding Utility Model. The DOST Soccsksargen RICE 2016 is the last regional invention contest in the program, according to Engr. Edgar Garcia of the DOST-Technology Application and Promotion Institute. “This is the last regional invention contest that we are going to conduct, since it is done in conjunction with the science nation tour as requested by the DOST Soccsksargen regional director, Dr. Laidan,” Garcia said.
Green Monday BusinessMirror
www.businessmirror.com.ph • Editor: Lyn Resurreccion
UAE’s journey toward clean energy
Monday, February 22, 2016 A13
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BU DHABI—The discovery of hydrocarbon reserves brought tremendous prosperity for the United Arab Emirates (UAE) and made it a central player in the global energy market. With one of the highest GDP per-capita levels in the world, the UAE has generally used its wealth wisely to stimulate sustainable economic growth. However, volatility in oil markets, growing unrest across the region and the growing threat of climate change has concentrated minds on the need for immediate and decisive action. The UAE has long recognized that environmental responsibility and economic diversification are essential for a better, more sustainable future. As the first country in the region to set renewable-energy (RE)targets and as home to the International Renewable Energy Agency (Irena), Masdar City and the Mohammad Bin Rashid Al Maktoum Solar Park, the shift toward cleaner energy sources and reduced carbon emissions is evident. Ahead of last December’s 21st Conference of Parties (COP 21) summit in Paris, the UAE government pledged to increase clean energy’s share of the national energy mix to 24 percent by 2021. This is a pivotal step toward making the UAE a global center of RE innovation. With more than 300 days of abundant sunshine every year, increasing solar’s share of the UAE energy mix should be attainable. Hydrocarbons that are not burnt to generate electricity can be used for other higher value-adding purposes, or sold to increase the
gross national income. Clean energy could also reduce the long-term social costs the government will face as adverse environmental and health effects could be minimized—or even eradicated. The UAE should be proud of its clean-energy leadership role. Abu Dhabi’s RE agency Masdar was a key sponsor of Solar Impulse, the flying laboratory full of clean technologies that represents 12 years of research and development. Solar Impulse generated tremendous global excitement when it attempted the first round-theworld solar flight to demonstrate how a pioneer ing spir it a nd clean technologies can change the world. T he Z ayed Fut u re Energ y Pr i ze —wh ic h represents t he environmental stewardship vision of the late Shaikh Zayed Bin Sultan A l Nahyan—celebrates impactful, innovative and longterm achievements in RE and sustainability. It ref lects the UAE’s commitment to finding solutions that meet the challenges of climate change, energy security and the environment. The 2016 winners were announced on January 19 and ranged from SOS HG Shaikh Secondary School, a school for 300 students three hours from Somaliland’s capi-
The heat goes on: Earth sets 9th straight monthly record
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UNITED Arab Emirates’s Minister of Energy Suhail Mohamed Al Mazrouei speaks to journalists prior to the start of a meeting of the Organization of the Petroleum Exporting Countries at their headquarters in Vienna, Austria. AP/RONALD ZAK
tal, Hargeisa, to BYD, the largest rechargeable-battery supplier and new energy vehicle manufacturer, based in Shenzhen. A lifetime achievement award to Dr. Gro Harlem Brundtland recognized her many achievements and accomplishments, included being a guiding force behind the “Brundtland Report” on sustainability over 25 years ago. T he UA E, like many other developed and developing countries, faces a number of clean energy and carbon-emission issues. In a reflection of its growing economy, there is an increasing number of vehicles on our roads, leading to increasing fuel usage and higher carbon dioxide, carbon monoxide and nitrous oxide levels. Electricity demand from individuals, industries and commercial buildings—which are
major consumers of electricity— is high and the UAE has a significant carbon footprint. Competitively priced oil, gas and energ y prices, while driving economic growth in some traditional industries, is undermining RE and stif ling growth in what could be a key sector of the countr y’s future economy. The recent adoption of the Paris agreement was a historic moment. COP 21 was an unprecedented international climate deal and presents both risks and opportunities for businesses who have an important role in terms of emissions reductions and investments to help governments achieve the goals. As countries start reforming their economies based on their COP 21 commitments, we should see the global economy evolving to a lower carbon model. Companies
will be required to be more open and transparent about the financial, environmental and social risks, and opportunities that they face from climate change. Investment in clean technology should grow dramatically— governments are expected to double their clean-tech research and development budgets, and the private sector is likely to increase its involvement and investment. The role of the private sector, in fact, is key to the sustainability agenda—because of its central role in the development of the global economy. The increase in the private sector’s rate of triple bottom-line reporting—which focuses on social and environmental, as well as economic costs and benefits—will be a key marker of the likely success, or failure, of the COP 21 program. IPS
ASHINGTON—The January figures are in, and Earth’s string of hottest months on record has now reached nine in a row. But the National Aeronautics and Space Administration (Nasa) said January stood out: The temperature was above normal by the highest margin of any month on record. And January set another record: Arctic sea ice reached its lowest point for that ice-building winter month. Nasa said January 2016 was 2.03 Degree Fahrenheit (1.13 Degree Celsuis) above normal. The National Oceanic and Atmospheric Administration (NOAA), which calculates temperatures differently, said last month was 1.87˚F (1.04˚C ), which is the second biggest margin in history. NOAA said the greatest was this past December. January’s average global temperature was a record 55.5˚F (13˚C ), easily beating the old January record set in 2007, according to NOAA. Records go back to 1880. There were colder-than-normal patches in parts of the US, Europe and Asia in January, but they were overwhelmed by incredible “off our chart” warming in the Arctic region, according to NOAA climate scientist Jessica Blunden. Siberia, northwest Canada and a lot of Alaska were at least 9˚F warmer than normal, she said. That heat was why there was record-low sea ice in the Arctic for this time of year, when sea ice grows, Blunden said. January Arctic sea ice averaged only 13.4 million squre kilometer in January, which is 233,000 sq km below the previous record set in 2011, according to the National Snow and Ice Data Center. It’s also 1 million sq kilometers less than the 30-year normal. The string of nine consecutive record-hot months matches June 1997 to February 1998, which was the last time Earth had a large El Niño. It is still behind the 10 straight months of record heat in 1944, Blunden said. It’s likely we’ll tie that record in February, she said. The current El Niño—an occasional natural warming of parts of the Pacific that changes weather around the world and spikes global temperatures—is tied with 1997 and 1998 for the strongest on record, according to NOAA. And while it has been predicted to ease soon, it has not lessened yet, NOAA Climate Prediction Center Deputy Director Mike Halpert said. Nasa chief climate scientist Gavin Schmidt blamed the record heat mostly on man-made climate change, with an assist from El Niño. AP
US city still lags on response to water-pollution crisis S
TATE and local officials still aren’t doing enough to fix problems that caused lead pollution of drinking water in Flint, Michigan—including having enough qualified workers to make sure the city water system functions adequately, a federal regulator said on Friday. M a rk Pol l i n s, d i re c tor of the US Environmental Protection Agency’s (EPA) Water Enforcement Division, said some progress had been made toward complying with an emergency order EPA issued on Januar y 21 in response to the crisis. But “significant issues” remain that need “ immediate attention” to safeguard the public water supply in the city of nearly 100,000, he said. Flint has missed by two weeks a deadline for showing that its water system has enough competent staffers, Pollins said in a letter to Keith Creagh, director of the state Department of Environmental Quality, and other officials. He also said the city and state have yet to finish a plan for preventing additional pipe corrosion, which enabled lead to contaminate some residents’ tap water. “To be clear, the city cannot switch to a new water source until there is comprehensive corrosioncontrol plan that is fully operational with optimized corrosioncontrol treatment in place and the system has the necessary staffing and expertise to reliably operate the drinking-water plant and distribution system,” Pollins said. Melanie Brown, spokesman for the state agency, said it was reviewing the letter and would respond.
DEMONSTRATORS walk during a mile-long march to the City of Flint Water Plant on Friday in Flint, Michigan. The march was organized in part by the Rev. Jesse Jackson to highlight the push for more action on the city’s crisis with lead-tainted water. RACHEL WOOLF/THE FLINT JOURNAL-MLIVE.COM VIA AP
“In the meantime, we look forward to continuing our collaborative work with the EPA to ensure that Flint water is safe to drink and that the proper regulatory support is in place,” Brown said. City officials did not respond to messages seeking comment. Flint switched its drinking-water source from Detroit, which draws from Lake Huron, to the Flint
River in April 2014 as a temporary cost-saving measure. The city planned to join another system that also would tap Lake Huron, but its pipeline had not been completed. Flint did not treat the river water with anti-corrosion chemicals, allowing the corrosive river water to scrape lead from aging pipes. The city returned to the Detroit system last October,
but residents were exposed to lead-tainted water for 18 months. Some chi ldren’s blood has tested positive for lead, a potent neurotoxin linked to learning disabilities, lower IQ and behavioral problems. The state agency has acknowledged misreading federal regulations and wrongly instructing the city not to apply corrosion controls. Gov. Rick
Snyder has apologized for the state’s handling of the disaster, but contends federal officials also failed. Susan Hedman, former head of the EPA regional office with jurisdiction over Michigan, resigned as the agency announced its emergency order last month. State agency Director Keith Creagh agreed to comply with the
order while raising doubts about its legality. But in documents released with the Pollins letter, EPA said many of the requirements were still unmet. Fl int has 4 4 employees r unning its water-treatment plant a nd ser v ices center a lt hough 6 3 a re ne e de d for e f fe c t ive operat ions, EPA sa id. Although the city is now adding phosphates to its water to inhibit corrosion, it hasn’t shown that enough is being used to restore the coating that would prevent lead leaching, EPA said, adding that Flint also submitted inadequate plans for corrosion-control monitoring and equipment, and for sampling to measure water quality. Other shortcomings EPA identified included failure to provide data—such as lead-in-water testing results and an up-to-date inventory of homes with lead service lines and failure to identify all areas in the city where people have elevated blood-lead levels. The documents also included a February 11 response from Creagh, who said that despite EPA’s criticisms, the state had “made substantial efforts and progress toward meeting the requirements of the order.” Also on Friday, the Rev. Jesse Jackson led hundreds of protesters to the Flint water-treatment plant, which the civil-rights leader referred to as a “crime scene.” The mile-long march began at Metropolitan Baptist Tabernacle, where Jackson, television Judge Greg Mathis and others spoke to a packed sanctuary before heading out into the street. The crowd chanted, “No pipes, no peace.” AP
A14 Monday, February 22, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Super-contango is not a comic-book hero
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OST of us are not the least concerned about the mechanics and process that bring goods to us at a particular price. We see items on sale, and evaluate the value. We drive by the gasoline station, and notice if pump prices are up or down. But in a world where nearly all economic factors and variables are interconnected, nothing is more important than the availability and price of crude oil. Unless you are living off the land in the Amazon rain forest or competing with the wild beasts on an African savannah, everything we touch is based on oil. Over 6,000 primary products come from oil, and are used in the manufacture of the clothes we wear to the medicines we take and everything in between. It is not necessarily important that we know about the entire complex and entangled system that puts the price of a liter of gasoline at P30 or at P50. The kind of information we usually get is simplified to “Too much oil is making prices go lower” or “War in the Middle East is making prices go higher.” The fact is that no one knows how much oil is actually being produced, and there is as much difference in the price of a barrel of crude oil as there is in the price of a T-shirt between vendors at the Baclaran Market. In addition, there are several pricing mechanisms for a commodity like oil. There is the cash or spot price for delivery today and the price for a future delivery. Usually, the price for future delivery is higher than the spot price, as storage costs and cost of money must be figured into the future delivery price. This is called “forwardation” or contango. Sometimes, though, a condition exists called “Super-contango,” where the future price is much higher than would normally be accounted for by storage costs. Super-contango can happen when there is no more currently available storage capacity; production is expected to run at full capacity through the future; and if the producers of the commodity are desperate for cash now. The future price should be the most realistic and sensible, as it takes into consideration supply-and-demand expectations. This may be confusing, but the point is that a situation of supercontango means the spot price is cheap—not that the future price is expensive—and the market expects the spot price will go lower. More important, this can occur not only for the basic commodity like oil but for byproducts like gasoline. Crude oil in a super-contango but also for global gasoline prices and the super-contango for gasoline has never been any greater. The spot price for gasoline is nearly $8 a barrel, less than what the reasonable price should be in 12 months. Local gasoline prices will continue to bounce around, but, at this time, the market is saying that we will have generally lower prices for a long time to come.
Cementing intl relations for regional stability Atty. Jose Ferdinand M. Rojas II
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RISING SUN
SUCCESSFUL visit.” This was how President Aquino described his trip to the United States last week, where he attended the US-Asean Special Leaders Summit held in California.
The meeting was suggested by US President Barack Obama at the Asia-Pacific Economic Cooperation summit held in Manila last year. While there, President Aquino also conducted a working visit in Los Angeles. In his arrival speech last Friday, delivered in Filipino, the President said among the topics at the summit were innovation and digitization. These two, he said, were thoroughly discussed in terms of their huge benefits to the economy, as well as their inherent risks. He also shared the country’s experiences in relation to global pandemics and climate change, and he emphasized the Philippines’s willingness to share its information and knowledge along these lines with other countries. Maritime concerns were also brought up, and support for the Philippines was clear from those
that President Aquino talked to on the matter. If the issue was mentioned by only a few before, it has now received more attention, and this is evident in the joint statement issued by the body regarding the stand of Asean and the US. The statement reiterates that security, stability and the freedom to travel in the West Philippine Sea must be maintained, and that the resolution of any disagreement or conflict related to this must be achieved through peaceful means in accordance with international law. After the summit, the President proceeded to Los Angeles, where he met with the leaders of companies in the fields of creative services, high-technology manufacturing and infrastructure. These leaders, he said, recognize the talents of Filipinos in these fields.
Among the things that President Aquino has achieved for the country is to gain a greater respect from the world, in relation to the Philippines’s transformation based on reforms and positive changes on the framework of the daang matuwid. He has also consistently advocated for peaceful means to resolve issues of instability and extremism to build an integrated Asean community that will effectively address common challenges and harness opportunities.
As a sign of their genuine interest of these companies in the Philippines, the chair man of Walt Disney is expected to visit the country sometime this year, with the added intention to help strengthen the local creative industry. Western Digital has expressed a desire to expand operations in the country, and the company Aecom will extend its assistance in terms of capacitybuilding in infrastructure. The President also attended the Los Angeles World Affairs Council,
and met with the Filipino community in that city. This, he said, could be his last trip abroad as president. It is a great honor, he explained, to be the country’s representative to meetings around the world, where he says he shares good news about the country’s renewed vibrancy and energy; and its readiness to engage with other countries to bring about a world of peace, compassion, and widespread and inclusive development. Among the things that President Aquino has achieved for the country is to gain a greater respect from the world, in relation to the Philippines’s transformation based on reforms and positive changes on the framework of the daang matuwid. He has also consistently advocated for peaceful means to resolve issues of instability and extremism to build an integrated Asean community that will effectively address common challenges and harness opportunities. Congratulations to President Aquino and his team for yet another successful diplomatic mission in behalf of Filipinos and for the benefit of the country. nnn
Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.
Behind the scenes: PPP opportunities for introspection By Alberto Agra
PPP LEAD Continued from A1 (5) It’s 24, not just 9 modalities. What has been officially reported by the PPP Center are 12 projects awarded under the BOT law applying BOT, build-transfer-and-operate or build-leaseand-transfer schemes. What is not captured on the PPP Center’s web site are other PPP modalities governed by laws and regulations other than the BOT law. The BOT law only lists down nine variants. Joint ventures (JVs), concessions, leases, privatization, and management and service contracts utilizing or not using public funds are other variants. Onerous and gratuitous donations, corporatization, rehabilitate-and-transfer, rehabilitate-
lease-and-transfer, rehabilitatetransfer-and-operate complete the roster of possible modalities. In fact, there could be more. Innovation should be encouraged. (6) Happy 25th year. Two landmark PPP legislations marked their 25th year last year. Republic Act (RA) 6657, or the BOT law, was enacted in July 1990. RA 7160, or the 1991 Local Government Code (LGC), was signed into law in October 1990. The LGC is the enabling law for JVs by local government units (LGUs). This is the same law that empowers LGUs to pursue PPP modalities not otherwise prohibited by law. (7) 35 LGU PPPs as against 12 nationals PPPs. What is not captured on the PPP Center web site are the PPP projects awarded by prov-
The BOT law only lists down nine variants. Joint ventures, concessions, leases, privatization, and management and service contracts utilizing or not using public funds are other variants. Onerous and gratuitous donations, corporatization, rehabilitateand-transfer, rehabilitatelease-and-transfer, rehabilitatetransfer-and-operate complete the roster of possible modalities. In fact, there could be more. Innovation should be encouraged. inces, cities and municipalities. In the past six years, LGUs have awarded at least 35 PPP projects, 23 more than the national government. Projects range from reclamation, power, water supply, hydropower, markets, capitol redevelopment, terminals, bridge and seaport projects. This truly demonstrates bot-
tom-up development and the breadth of local autonomy. I hope this is acknowledged and respected by those who want to stymie local initiatives. These LGUs must be commended rather than their PPP ordinances repealed. (8) 66 PPP codes proposed to be “killed.” There is a pending bill in Congress, certified as urgent by the President, which proposes to expressly repeal 66 PPP ordinances enacted by LGUs. Enactments by 20 provinces, 32 cities and 14 municipalities will be negated. For those advocating this, they should be mindful that no one has the monopoly over righteousness and expertise. (9) 12 GOCC water JVs. Also not on radar and promotional materials of the PPP Center are JVs by water districts entered under the 2013 Guidelines issued by the National Economic and Development Authority. Bulk water supply, rehabilitation and operations and management projects have been awarded. (10) 50 possible risks. PPPs are not risk-free. Proponents, parties and payors of PPP projects must S “PPP,” A
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Constitutional 60/40 foreign-ownership rule and the PSE
BusinessMirror
John Mangun
Atty. Lorna Patajo-Kapunan
O
LEGALLY SPEAKING
N February 14 we witnessed how couples celebrated the Valentine’s Day. Malls and restaurants were buzzling with lovers who took part in this romantic festivity. These lovers seem inseparable. However, some married couples know that there may really be no such thing as forever, even after they tied the knot. Article 35 of the Family Code of the Philippines provides that a marriage may be declared null and void if any of the parties married below 18 years old, or the solemnizing officer is not legally authorized to perform marriage unless either or both parties believe in good faith, or the marriage was solemnized without a marriage license, or if the marriage is bigamous or polygamous, or there is a mistake in the identity of the parties. When a marriage is declared null and void, it is as if no marriage took place. The children of a couple, whose marriage was declared null and void based on the foregoing, are considered illegitimate. The most popular ground to declare a marriage null and void is the psychological incapacity of either or both parties. A person is deemed to be suffering from psychological incapacity when he or she fails to comply with the essential marital obligations to live together, observe love, respect, and fidelity and render help and support. The incapacity must exist before the celebration of marriage. Simply put, the actuations of the spouses during the courting stage, or even before that, matter in ascertaining the incapacity. A spouse may also file for annulment of marriage. Unlike declaration of nullity, where the marriage is considered to have not existed, in annulment, the marriage existed until after the same is annulled. That is why children, who are conceived and born before the annulment of marriage, are considered legitimate. A marriage may be annulled if during the celebration of the marriage, a party although 18 years old or over but his or her parent has not consented to the marriage; or that either party was of unsound mind; or that although the parties consented to the marriage, such consent was obtained through fraud, force, intimidation or undue influence; or the party is impotent or has a sexually transmitted disease that is serious and appear to be incurable. But if one can no longer take to live together with his or her spouse but is not yet ready to dissolve the marital bond, the law provides for
PPP. . .
C A
know that PPP projects may flop, be derailed, delayed, hailed to court, and not actually serve the public good. There are at least 50 risks that may hound PPP projects from inception to end of project life.
The most popular ground to declare a marriage null and void is the psychological incapacity of either or both parties. A person is deemed to be suffering from psychological incapacity when he or she fails to comply with the essential marital obligations to live together, observe love, respect and fidelity, and render help and support. The incapacity must exist before the celebration of marriage. Simply put, the actuations of the spouses during courtship, or even before that, matter in ascertaining the incapacity. legal separation of the spouses. The grounds for legal separation are (1) repeated physical violence or grossly abusive conduct directed against the spouse, a common child, or the child of the aggrieved spouse; (2) physical violence or moral pressure to the spouse to change religion or political affiliation; (3) attempt to corrupt or induce the other party, the common child, or child of the aggrieved party to engage in prostitution; (4) if the other party has been sentenced to an imprisonment of more than six years; (5) drug addiction or habitual alcoholism; (6) lesbianism or homosexuality; (7) contracting a subsequent bigamous marriage; (8) sexual infidelity or perversion; (9) attempt against the life of the other party; (10) abandonment without justifiable cause for more than one year. There is nothing wrong in loving someone. To love and be loved is the best feeling. But if to continue to be with someone already poses danger to you, you must think twice. Our laws are there to protect married individuals against continuous oppression from someone whom once in their lifetime they mistakenly considered to be their “Forever”. For comments, you may e-mail me at lpkapunan@kapunanlaw.com. There are successor, demand, regulation, foreign exchange, legal, taxation, protester’s, environmental, weather, financing and operations risks, just to name a few. Risks may be clustered into four—policy and political, economic and fiscal, process and legal, and environmental and spatial. To be continued
Continued from A1 But in this digital age, registered ownership should simply be a few keystrokes on the computer. Some stockbrokers are against the new arrangement because their electronic bookkeeping is not quite updated to the 21st century. Others simply do not want the added hassle and expense. There could be others that may, in fact, be hiding companies who are potentially breaking the 60/40 rule and that is the dark side of this issue. Some Filipino-listed companies owned by Filipinos do not make money the old fashioned way through corporate profits. They make money selling shares of stock
that they or the company owns to others, particularly foreigners. When it’s time for a new Mercedes or the wife (wives?) wants a shopping trip to Singapore, a good way to raise cash is to sell millions of shares. By the time this happens several times for a few years, the 60/40 ownership has been secretly breached. This could not happen without the assistance of a “friendly” stockbroker. The argument that says if the beneficial owners are disclosed, the inflow of foreign funds to the stock market could be hindered is a smoke screen. Every country has some sort of foreign-ownership restrictions and that include publicly listed companies. Further, no legitimate (money launderers
Auditing the auditors Jun Cuaresma
DEBIT CREDIT Part One
I
N the recent years, auditing the auditors has become a global development in the accountancy profession amid news of inappropriate financial reporting or accounting scandals happening around the world. A number of national professional regulators have responded accordingly to these inauspicious events in the accountancy profession and have set up a regulatory body to oversee the conduct of an audit of companies by the auditors [hereinafter, interchangeably referred to as external auditors or Certified Public Accountants (CPA) practitioners] in their respective countries. In the United States, for example, the Public Company Accounting Oversight Board (PCAOB) was established by the US Securities and Exchange Commission (SEC) to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate and independent audit reports. The PCAOB required that auditors of US public companies be subjected to external and independent oversight in the performance of their audits of public companies. Similar regulatory bodies have also been in operation in other Asean countries, including Singapore, through its Accounting and Corporate Regulatory Authority, and Malaysia’s Audit Oversight Board. In our jurisdiction, our Professional Regulatory Board of Accountancy (BOA), being the designated government regulatory body that supervises the accountancy profession, has similarly responded through the adoption of an external audit Quality Assurance Review (QAR) Program to meet its duties imposed by the Philippine accountancy law, particularly in the conduct of oversight into the quality of audit of financial statements (FS). Accordingly, the Professional Regulation Commission (PRC), upon the recommendation of the BOA,
approved a resolution in 2009, entitled “Adoption of the Rules and Regulations [RR] for the Implementation by the BOA of the QAR Program.” This RR was subsequently revised in 2010. However, it is not at all easy for the BOA to implement the provisions of such RR. It had to stop the implementation of the QAR Program following the filing of an injunction suit by the Association of Small Accounting Professionals in the Philippines. The suit was filed in December 2010 and its resolution has been very slow, until the assumption into office of the current BOA Chairman Joel Tan-Torres who has been closely working with the CPA practitioners to resolve relevant issues and for the eventual implementation of the QAR Program. Very recently, after conducting a series of consultative meetings and dialogue with the plaintiff and other stakeholders, the RR earlier mentioned was further revised and, in December 2015, the BOA passed a resolution endorsing for approval by the PRC the adoption of the “Revised RR for the Conduct by the BOA of Oversight into the Quality of Audits of FS and Operations of CPA Practitioners.” I am hopeful that the PRC will approve such endorsement soon that would help pave the way for the final resolution of the injunction suit. It is
South Carolina puts history on Trump’s side B A R. H | Bloomberg View
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OUTH Carolina made Donald Trump the clear front-runner for the Republican presidential nomination, revived Marco Rubio’s campaign and sounded the death knell for Jeb Bush. The New York businessman won his second convincing victory in a week, following New Hampshire. Rubio, pronounced dead after a dismal New Hampshire performance, was locked in a tight battle with Ted Cruz for second place, well ahead of the rest of the field. Bush, trailing badly, dropped out as the South Carolina results came in.
Cruz failed to dominate the heavily evangelical vote in the state, a disappointment to a campaign that relied heavily on that constituency. On the Democratic side, Hillary Clinton’s win over Bernie Sanders in the Nevada caucuses was a much needed shot in the arm after she was trounced in New Hampshire last week. If, as expected, she wins a big victory in the South Carolina Democratic primary next Saturday, it could position her to run up a sizable delegate lead on March 1 when 11 states vote in Democratic contests, though Sanders is positioned to win several of those states.
With almost 22 percent of the Democratic delegates to be selected on March 1, a strong Clinton showing would make her eventual nomination appear to be almost inevitable. Trump’s win in the Palmetto State, with very different Republican voters from New Hampshire’s, confirmed that he commands such a fervent following that episodes that would undo conventional candidates don’t hurt him. He came across as rude and boorish in a South Carolina debate when he seemed to blame former President George W. Bush for the terrorist attacks of September 11, 2001. Then he engaged in a public quarrel with Pope Francis. Then
he won decisively—and failed to mention Jeb Bush in his victory statement. The contest also settled the issue of which Floridian would move on, propelling Rubio forward and ending the once formidableseeming campaig n of for mer Governor Bush. For many mainstream Republicans, Cruz isn’t any more attractive a choice than Trump. “Whoever wins the presidency is going to carry the Senate with them and now make a Supreme Court appointment; that’s 80 percent of government,” said Tom Davis, a former Republican congressman from Virginia. “Why then turn to Trump or Cruz who can’t win
Monday, February 22, 2016 A15
excluded) foreign investor wants to break the rules in fear of being tied up in a costly civil/criminal court case or losing his or her legal shareholder rights. Major companies in restricted industries that encourage, or at t he lea st t u r n a bl ind eye to, brea k i ng t he ow nership rules do so only for their ow n self-interest. More buying from any source—even illegal—may put the stock price higher. We have had too many instances in the past when the leg itimac y and credibi lit y of the Philippine stock market was sacrificed for personal gain. The PSE says it has prevented and will continue to do all that is necessary to monitor and prevent 60/40 violations. That is in the PSE’s best interest. But the truth is the PSE is constrained by the information the stockbrokers provide. There are numerous and even high-profile companies operating
in the Philippines that are 100-percent owned by foreigners. The “beneficial owners” are the foreigner’s wife, the sister-in-law, the sister-in-law’s boyfriend, and of course, the ever-present Attorney de la Cruz. However, the SEC, the PSE and the stockbrokers should do all that is necessary to enforce the law and to implement and follow the rules. Otherwise, we may look to find other laws and rules that are inconvenient to enforce and that would not be good for the country or our capital markets. Transparency, honesty and, most important, full disclosure, is best for all stock-market investors. If the local stockbrokers can comply with United States Foreign Account Tax Compliance Act requiring their Filipino clients to disclose financial connections to the US, then they can follow the Philippine law on restricted foreign ownership. There is no legitimate excuse for not doing so.
Our Professional Regulatory Board of Accountancy (BOA), being the designated government regulatory body that supervises the accountancy profession, has similarly responded through the adoption of an external audit Quality Assurance Review (QAR) Program to meet its duties imposed by the Philippine accountancy law, particularly in the conduct of oversight into the quality of audit of financial statements. Accordingly, the Professional Regulation Commission, upon the recommendation of the BOA, approved a resolution in 2009, entitled “Adoption of the Rules and Regulations [RR] for the Implementation by the BOA of the QAR Program.” This RR was subsequently revised in 2010.
and its external auditors if significant or material financial reporting lapses are found. It is also worth mentioning that the SEC has been working on the revision of its Rules on Financial Statements Reporting that include, among others, the implementation of its own QAR System of External Auditors accredited by the commission. Thus, while the SEC mainly regulates companies registered with the commission, it may also review the quality of audit of the external auditors of these registered companies once such revision to the rules is approved for implementation, and to which I am also hopeful that it will be approved soon. The eventual implementation of the BOA of its QAR Program and the final approval of the SEC of the revisions to its current rules to incorporate its own QAR System would be good for the accountancy profession and its stakeholders. However, while the implementation and approval for a QAR Program/ System are pending, there is no local regulatory body that currently audits the auditors in this country. Thus, external auditors are not currently being audited for the quality of their work. Such situation may be good or bad, or should I say, may pose both challenges and/or opportunities to the stakeholders of the accountancy profession, including, among others, our regulators; the companies being audited or the auditees; and the CPA practitioners, whether big firms or small or medium practitioners. To be concluded
also worthy to note that the BOA has included the implementation of the QAR Program as part of its Six-Point Strategic Plan for the accountancy profession. At any rate, while the BOA has adopted a QAR Program, it has yet to be implemented. On the part of the Philippine SEC, it currently performs regular evaluation of audited FS of companies, mostly those that are listed in the stock exchange and other companies or entities falling under what it calls as public interest entities. In addition, as part of its accreditation process of external auditors, it also reviews the audited FS of the selected clients of the external auditors who are applying for the first time or renewing their SEC accreditation. Both reviews aim to ascertain the compliance of the reporting companies with their financial reporting requirements. Needless to say, appropriate sanctions will be imposed on both the reporting company
a general election?” The next Republican contest is on Tuesday in Nevada, a caucus. Trump is ahead in polls there, followed by Cruz and Rubio, though polling isn’t especially reliable in caucus states. The billionaire New Yorker’s South Carolina triumph puts him in a commanding but not invincible position. To win three of the first four contests and then fade would be unprecedented in modern politics. Still, hurdles stand in his path. On March 1 a fourth of the Republican delegates are to be chosen in 12 states, mostly in the South. All are to be selected by
Jun Cuaresma is the managing partner and chief operating officer of P&A Grant Thornton. P&A Grant Thornton is a leading audit, tax advisory and outsourcing services firm and is the Philippine member of Grant Thornton International Ltd. He has been in public accounting for his entire professional career, with over 30 years of solid experience in the audit of local and international companies in various industries. This column accepts contributions from accountants that are of interest to the accountancy profession, in particular, and to the business community, in general. Articles can be e-mailed to boa.secretariat.@gmail.com.
propor tiona l re present at ion , meaning a candidate can pick up delegates without winning. This places a premium on smart targeting and organization. That is not Trump’s strength. When the race is focused on one state, he has been able to dominate. Now we’ll see how well he can do when there are multiple contests. The anti-Trump faction also expects that he won’t be so strong when the race narrows to one or two opponents, although these people have underestimated him all along. Moreover, it’s uncertain how long it will take for a single opponent to emerge, or who it will be.