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Monday, March 28, 2016 Vol. 11 No. 170
‘Gun ban compounds PHL exporters woes’ $2.14B T
P. | | 7 DAYS A WEEK
ARE WE ORGANIZATIONALLY READY FOR PPPs?
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HE implementation of the gun ban, a prohibition attendant to the national elections in May, is compounding the problems confronting exporters, manufacturers of semiconductors and electronic products said over the weekend.
The country’s revenues from shipments of electronic products in January 2016
The Semiconductor and Electronics Industries in the Philippines Inc. (Seipi) said companies are now required to secure certificates of S “G ,” A
INSIDE
BMReports
JESSY’S THE GIRL
Hacktivism: A threat to 2016 polls? B M R M
First of three parts
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LIFE
D1
RISING CHINA RISK TARNISHES HONG KONG BUSINESS HUB LUSTER
WENTY-YEAR-OLD Kyuubei is a hacker, and he’s good at what he does. Lanky and standing at 5"3', he passes off as a regular among thousands of college students in the country’s largest engineering educational institution. He slacks, procrastinates and crams for his academics. Kyuubei, his preferred alias, admittedly never topped the class: His real talents lie somewhere he deems more practical and useful outside the four corners of a classroom.
PPP Lead Alberto C. Agra
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RE our government agencies ready for publicprivate partnership (PPP) arrangements? Do we have the right leaders, partners and followers? Do implementing agencies undertake PPPs just to join the bandwagon? Do all stakeholders understand what PPP is and what it is not? Do partners share the same vision and trust each other? PPPs are not just about technical and financials. Organizations must be ready to enter into PPPs. PPP is not for the technically unequipped, knowledge-dependent, innovation-averse, fainthearted and distrustful organizations. C A
PPP SELECTION REQUIREMENTS
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PSALM wants to recover differential ancillary service charges from NGCP
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PERSPECTIVE
E4
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HE Power Sector Assets and Liabilities Management Corp. (PSALM) wants to recover nearly P7 billion in so-called differential ancillary service charges from the National Grid Corp. of the Philippines (NGCP). If approved by regulators, this will be passed on to distribution utilities (DUs), which, in turn, will result in additional power rates for end-users. Effectively, this is an increase in power bills.
PESO EXCHANGE RATES n US 46.2560
₧6.89B
Amount of differential ancillary service charges being sought by PSALM
In an eight-page application filed with the Energy Regulatory Commission, a copy of which was obtained by the BusinessMirror, the recovery of P6,888,065,922.01 worth of
ancillary services differential for the billing period 2008 to October 2009 will be collected in only a month in the Luzon grid, and six months in the Visayas and Mindanao grids. Broken down, P2 billion will be collected in the Luzon grid, P2.5 billion in the Visayas and P2.4 billion in Mindanao. Of the P2-billion differential ancillary service charge in Luzon, P1.5 billion will be collected by the Manila Electric Co. (Meralco) from its customers.
ACCOUNTABILITY
PUBLIC ADVANTAGE
THE P-A-C-T
COMPETITION
TRANSPARENCY AUTHOR: ALBERTO C. AGRA
BM GRAPHICS: JOB RUZGAL
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n JAPAN 0.4116 n UK 65.7622 n HK 5.9662 n CHINA 7.1295 n SINGAPORE 34.0068 n AUSTRALIA 35.2147 n EU 51.8900 n SAUDI ARABIA 12.3356
Source: BSP (23 March 2016 )
A2 Monday, March 28, 2016
BMReports BusinessMirror
www.businessmirror.com.ph
Hacktivism: A threat to 2016 polls?
He started young. In fifth grade, autorun viruses that were captured in storage devices were spreading like wildfire. Kyuubei decided to venture out and look deep into the Internet for communities centered on hacking and specialized in dealing with malicious software (malware). There, he stumbled upon a fellow enthusiast “Tear[A]Door” whom Kyuubei credits to having spawned the VBScript-worm generator that al-
lows users of the program to construct viruses of their own. He also met “alcopaul,” who has mastered and is one of the creators of the Joint Photographic Experts Group infector malware. Their conversations became regular correspondences. Kyuubei was hooked. “It looks cool, like in the movies, where you type and code and you look like you really know what you’re doing,” he said in an interview. “But in real life ,you look stupid reading
logic functions and algorithms.” The computer engineering major said he is a “master of none” and knows only basic hacking. Nevertheless, he already managed to infiltrate a government web site one morning in May 2011 while he was still in high school. Along with a fellow hacktivist, who uses technology mainly for political agenda, they used the handle“BatangMahiligMagBatibot” and defaced the “What’s New in DILG” tab in the Department of Interior and
Local Government home page. Originally, the tab would take viewers to a page with a current news blast. Kyuubei and his companion capsized the page and flashed the logo of an infamous pornography site. It was instantly taken down the same evening. A few weeks later, he teamed up with the group “Puella Magi Madoka Magica Squad [PMMMS]” and vandalized several sites, namely, the WWF Philippines, EarthHour and science.ph,
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leaving animé videos on their trail. Sans Kyuubei, the same group was credited for allegedly hacking into the Bureau of Customs web site later on. Upon confirmation, it was not the PMMMS that terrorized the web site but Philker, a different group who noted the weak defenses of government web sites. This compromised several sensitive information, including usernames, passwords and confidential government data. The hackers also put up a page, redirecting to a message that explained the group only wanted to impose a warning to the public. “May this deface serve as a reminder that you always have to look out for intruders. No matter how intelligent and competent your computer personnel are, there will be unethical hackers that are constantly working on breaking in your security,” a part of the message said.
Elections at risk
PETER SPARKS, senior director of Symantec’s Cyber Security Services for Asia Pacific and Japan, said in a conference that large-scale events have a vast tendency to trigger malicious attacks. “People should be on the lookout for them, especially that the country is so focused on electing prominent government officials,” Sparks said. A couple of days before the 2013 midyear elections, web sites of several government agencies were compromised by a Distributed Denial of Service (DDoS) attack. DDoS attacks are the most common form of cybersecurity breach, a well-coordinated attack aiming to interrupt the normal traffic on the web site. According to IP Converge Data Services Inc. (IPC), DDoS disrupts the regular functions of a web site, triggering a crash in the system. IPC, an Internet-data center, telecommunications and cloud-services company, said that DDoS attacks enables hackers to manipulate any part of the site that they decide on interfering with depending on the assailant’s agenda. DDos attacks may also be a logistical façade, according to Sparks. There might be more to an attack defacing a web site. This may only be a diversion to cover up for a larger attack ongoing behind the scenes, like pilfering data or classified information. Niño Valmonte, IPC director of Product Management and Marketing, said in an interview the worst case scenario for the elections would be the hacking of a Precinct Count Optical Scanner (PCOS) machine to manipulate the election results. “Launching DDoS attacks on a web site showing partial results [examples are Comelec or Namfrel] to incite
Gun ban. . .
speculation is also possible. Attackers may also create malware that could give them a way to steal crucial information from PCOS machines or other unprotected and/or unsecured government computers,” he said. According to Valmonte, there may be various reasons as to why cyberattacks are launched. It could be for money, intimidation, hacktivism and other personal motivations. Data from Symantec shows that on an estimate, hackers earn billions, trillions maybe, globally through cybercrime, espionage, subversion and sabotage, the losses and cost of damage not included. Because of the covert illegal operations, precise numbers could not be determined as to how much money is generated from cybercrime. However, Kyuubei said this may be an overkill, except for the mafia groups that, according to him, are mostly of Chinese decent with wide-scale botnets. At the moment, their DDoS services stands at $300 per hour.
Nationwide threats
FOR the time being, Kyuubei linked up with Anonymous Philippines. Most of his obligations with this group involved hacking government web sites and putting up their success in Facebook, making them instant celebrities in their respective cyber communities. Anonymous Philippines has been credited for countless cyberattacks in the country. Information-technology experts regard it as the largest hacktivist group in the Philippines, tampering with government web sites to publicly express their political woes. The social media has become an effective outlet in spreading the group’s agenda. Aside from web site defacement, Kyuubei relished aggravating system administrators whom he accuses of letting their guards down. “I mess with the ‘friendly neighbor’ system administrators in the government for not properly [doing] their jobs,” the hacker said. Admittedly, he said that compared to the years 2011 and 2012, government web sites have considerably improved in terms of security. “Before, it was very easy to check e-mails of government employees because the web sites were so exploitable. Now some government web sites are using CloudFlare so it did level up a notch,” he said. “[The web sites are] a bit more secured than before.” CloudFlare is one of the many cloud services that offer online protection. The most common cloud service resources are Software as a Service, Platform as a Service and Infrastructure as a Service. These coincide with IPC’s insight that cloud-based solutions will be more beneficial to the ease and speed of deployment of the web sites. These softwares optimize Web pages to peak performance and prevent malwares from blocking web-site traffic and help decrease other forms of attacks. “Any form of technology is vulnerable to attacks,” Valmonte said. “In order to ensure the security of the elections, the Philippine government can take advantage of technologies available in the market today.”
To be continued
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authority (CA) from the Commission on Elections (Comelec) for chemicals that are also being used in making explosives. Manufacturers, however, complained of the poll body’s slow issuance of CAs—a requirement for companies that import or export firearms and components, as well as chemicals and substances used in making explosives. Seipi President Dan Lachica said the process of applying for a CA, which can take more than a month, has become a “costly burden” to manufacturers of semiconductors and electronic products. Lachica also told the BusinessMirror that some companies are already on the verge of shutting down production lines because of the difficulty in securing raw materials. “One company already had one of their failure-analysis laboratory down, and will eventually stop operations of another if they won’t be able to secure the Comelec exemption for their chemical. The cause of delay in their application is the changing documentary requirements,” Lachica said. He said another company is already planning to stop its assembly line as its shipments of chemicals are being held at a port. The firm, which Lachica did not identify, has already incurred “substantial” demurrage costs for prior shipments due to the delay. While Seipi says it respects the Comelec’s mandate to enforce the gun ban, it’s also asking for the streamlining of documentary requirements and updating of its online system. S “G ,” A
news@businessmirror.com.ph
BMReports BusinessMirror
Monday, March 28, 2016
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Senate probers seek assurance on safety of PHL fund in NY Fed
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ENATE probers need confirmation from the Bangko Sentral ng Pilipinas (BSP) on the continued safety of Philippine accounts in foreign banks following the $81-million cyber heist of the Bangladesh Central Bank account in the Federal Reserve Bank of New York (NY Fed). Senate President Pro Tempore Ralph Recto said on Sunday he had information that the Philippines is among the 250 foreign central banks and governments with accounts at the Fed bank in New York.
Still, Recto said he will raise the matter at the resumption of the Blue Ribbon Committee inquiry with an eye to finding out what guarantees the BSP has obtained with regards to safekeeping Philippine funds in foreign institutions, given the stepped up global cybersecurity measures taken after the hacking of the Bangladeshi central bank account. “Yes, we do have accounts with them [NY Fed],” Recto told the BusinessMirror, adding that he “will also put it on record” when the hearings resume on Tuesday. This developed as Senate probers also wonder why other key players in the $81-million cyber heist were not charged by the Anti-Money Laundering Council (AMLC), along with businessmen Weikang Xu and Kim Wong, for alleged involvement in money laundering activities. Sen. Sergio Osmeña III observed that the Sen-
250 Number of foreign central banks and governments with accounts at the Federal Reserve Bank in New York
ate investigating committee may have to compel Wong to tell all he knows about the $81-million international money-laudering case “Mr. Wong will have to explain his role,” Osmeña said. Osmeña suggested the bank concerned, the Rizal Commercial Banking Corp. (RCBC), should also “show it exercised due diligence over the suspicious transactions.”
Sen. Aquilino Pimentel III said he is keen on finding out why only Xu and Wong were indicted. Pimentel said he will ask AMLC why only Wong and Zu were included in the charge sheet when it was shown at earlier hearings that other parties were similarly implicated. For instance, Pimentel wants to know “what happened to the [other] actors” before the money reached Wong’s company, Eastern Hawaii, in Cagayan. The Senator also cited Philippines Remittances , the remittance firm that converted into local currency the dollars withdrawn using fictitious accounts from RCBC, as
well as businessman William So Go, from whose alleged accounts the hacked funds from the Bangladeshi central bank account passed through. “How come they have not been included in the cases? There must be a reason. I am not insisting that they be included, but I want to hear the reason they have not be included,” Pimentel added. For his part, Senate Minority Leader Vicente Sotto III said he will be “surprised” if the missing witness, businessman Wong, allegedly undergoing medical treatment in Singapore, would show up at the Senate hearings. “To see is to believe,” Sotto added.
Yes, we do have accounts with the Federal Reserve Bank of New York.” —R
BMReports BusinessMirror
A4 Monday, March 28, 2016
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PHL trade deficit widens on higher imports in Jan
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HE country’s trade deficit widened in January on the back of a higher import bill during the period, which grew at its fastest pace in five years, according to data released by the Philippine Statistics Authority (PSA).
PSA data showed the balance of trade in goods (BOT-G) deficit widened to $2.638 billion in January, 206.1 percent higher than the $861.8 million recorded in the same period last year. Based on historical data provided by the PSA, this is the highest BOTG deficit posted in a single month between 2014 and 2016.
Data showed that, while the Philippines recorded surpluses with its other major trading partners, the country’s trade deficit with China reached $818.06 million. The impact of China on the Philippine economy has been significant, especially of late. This has been highlighted recently by multilateral development agencies and economists.
A study released by Tokyo-based Asian Development Bank Institute (ADBI) even estimated a reduction of 0.47 percentage point in Philippine GDP if China’s economy slows to 6.2 percent between 2016 and 2020. Apart from GDP growth, the ADBI study stated the Philippines’s export earnings, import payments and overall trade balance as a percentage of GDP will also be affected by China’s slowdown. Philippine exports will suffer the largest reduction at 0.75 percentage point and imports growth at 0.45 percentage point between 2016 and 2020. “The PRC’s slowdown would dampen the exports growth of the Philippines; Taipei, China; and Hong Kong, China, by 0.66 to 0.75 percentage point, reflecting the central role the PRC plays in the regional production chains of textiles, apparel and
$2.63B
Trade deficit incurred by the Philippines in January
electronics,” the ADBI study read. Electronics is an important product for the Philippines as it continues to account for the biggest chunk of the import bill and export revenues. In January the country’s import payments grew 30.8 percent to $6.82 billion, on the back of a 67.1-percent increase in purchases of electronic products. Electronic products accounted for 32.4 percent, or $2.21 billion, of total import bill during the period, higher than the $1.32 billion
recorded in January 2015. PSA data also showed that payments for raw materials and intermediate goods, which include electronic products, grew 12 percent to $2.48 billion in January. It accounted for 33.6 percent of total imports. Purchases of semiprocessed raw materials amounted to $2.3 billion, 19.6 percent higher than the $1.92 billion recorded in January 2015. “The double-digit growth in imports of semiprocessed raw materials, particularly manufactured goods, since the second half of 2015 indicates that there is a growing domestic market. This bodes well for industrial production,” Economic Planning Secretary Emmanuel F. Esguerra said. “Likewise, the higher purchase of materials and accessories for the manufacture of electrical equipment, which is used as an interme-
diate good for semiconductors, also has a positive effect on electronics exports,” he added. The country’s top 10 import sources for January accounted for $5.21 billion of the import bill, or 76.3 percent of the total. The top 3 import sources are China, Japan and the United States, which accounted for 17.9 percent, 10.7 percent and 8.9 percent, respectively. Imports from China reached $1.22 billion, an increase of 38.1 percent from $886.27 million in January 2015. Shipments from Japan amounted to $727.04 million to the total import bill in January 2016. It grew by 66.4 percent from its January 2015 value of $436.97 million. The country’s imports from the US reached $609.87 million, an increase of 19.9 percent from $508.78 million in January 2015.
BSP sees tamer inflation in March
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NFLATION was seen likely lower in March on account of soft energy prices and as a result of a comparably stronger peso averaging 23.7 centavos higher to 46.256 per dollar just before the long Lenten weekend. In a statement, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said inflation were to range from a low of 0.6 percent to no more than 1.4 percent in March. Inflation at this level is significantly lower than the government target of 2 percent to 4 percent. Inflation has proven lower than target since May last year and has moved back closer to zero at only 0.9 percent in February, from 1.3 percent just a month earlier. “The downward adjustment in power rates and the recent appreciation of the peso could offset higher domestic oil prices during the month,” Tetangco said. “Looking ahead, the BSP will remain attentive to evolving price trends to ensure that the monetarypolicy stance remains consistent with the mandate of preserving price stability conducive to sustained economic growth,” he added. The policy-making Monetary Board of the Bangko Sentral kept the
Gun ban. . . C A
The Comelec’s online system is not updated. Thus, stakeholders frequently visit the Comelec to personally check the status, but the only update they get from frontliners is that, ‘the application is on-process,’” Lachica said. The changes in requirements and slow processing also result in delays in the release of shipments from ports, causing demurrage and storage fees incurred by importers to balloon. Lachica said the Comelec’s efforts are “a duplication” of the Philippine National Police’s regulation of certain chemicals. Last Monday Lachica said Seipi held a dialogue with Comelec Chairman Andres Bautista, who vowed to delegate the verification and review of requirements to the Philippine
policy rates steady at its second ratesetting meeting this year just before the long Lenten weekend began. In particular, the Monetary Board decided to keep its overnight borrowing, or reverse rate, at 4.0 percent and the overnight lending, or repurchase rate, at 6.0 percent. The interest rate, on term RRPs, RPs and special deposit accounts (SDA) were also kept steady. The deposit reserve ratios were, likewise, left unchanged. The BSP said the steady rates were a reflection of their assessment of stable inflation. He also said the target inflation this year and next will likely be met. “The Monetary Board also noted that the risks surrounding the inflation outlook have remained tilted to the downside, as downward price pressures could arise from slowerthan-expected global economic activity and potential second-round effects from lower international oil prices,” Tetangco said. “Meanwhile, upside risks to the inflation outlook persist, particularly those that could emanate from the impact of El Niño dryweather conditions on food prices and utility rates, as well as pending petitions for power-rate adjustments,” he added. Bianca Cuaresma
END OF LENT
A man carefully detached parts of the Black Nazarene made of paper mache in Makati City on Easter Sunday. The image of the Black Nazarene was created as part of the city’s observance of Holy Week. NONIE REYES
Economic Zone Authority to hasten the application process. He said the Comelec has also agreed to update its web site and to look at alternatives to fast-track the release of CAs, such as asking the Department of Trade and Industry to vouch for Seipi companies in lieu of some requirements. “We hope processing [of CAs] will take less than 10 days,” Lachica said. The semiconductors and electronics industry helped buoy exports last year, posting sales growth of 6.4 percent. Electronic products remained as the country’s top export with total receipts of $2.14 billion, accounting for 51.1 percent of the total revenues in January 2016, according to data from the Philippine Statistics Authority. Seipi has set a 4-percent revenue growth target for 2016.
Australia shifts toward public transport boost under Turnbull
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RIME Minister Malcolm Turnbull’s government wants to boost funding for road and rail public-transport infrastructure on the fringes of Australia’s major cities as a lure for housing-development projects. “Land prices in the outer suburbs of Sydney or Melbourne are sufficiently high and have accelerated enough over recent years to be able to support funding of major transport infrastructure projects,” Assistant Minister for Cities Angus Tay-
lor said in a Sky Television interview on Sunday. “If we’re to make major investments in transport infrastructure, it’s right and proper that we can have an expectation that there are major new housing developments” in those areas, he said. Surging home prices have pushed more Australian families to the fringes of sprawling cities like Sydney and Melbourne, where public transport is often substandard and roads frequently gridlocked. Bloomberg News
PSALM wants to recover differential ancillary service charges from NGCP “On the part of Meralco, we estimate that the rate impact on our customers would be around P0.51/kWh [kilowatt-hour] if the recovery is approved by the commission,” Meralco Head for Utility Economics Lawrence Fernandez told the BUSINESSMIRROR on Sunday. The anticipated P0.51-per-kWh rate increase is equivalent to paying P103 more for Meralco customers who typically consume 200 kWh in a month. “If the ERC approves the motion, the NGCP will have to bill the DUs nationwide, including Meralco. Then the rate impact will be reflected after one month in the bills of end-users. The impact will mainly be felt as part of the transmission charge.” However, there will also be some upward effects on the system-loss charge, the value-added tax or VAT and local franchise tax, Fernandez said in an interview. “For a 200-kWh household, the rate impact is estimated to be P0.51/kWh or P103,” Fernandez reiterated. Meralco has 5.8 million customers as of end-December 2015, of which 91.6 percent are residential customers. The remaining 2.1 percent are commercial customers and 6.3 percent comes from industrial customers.
maintaining power quality, stability and security of the power grid. They stabilize electricity supply and prevent system-wide blackout and regulate the volume of electricity delivered to end-users. In emergency cases, when a power plant breaks down, for instance, ancillary service providers make backup plants readily available. NGCP said ancillary services are needed to ensure reliability in the operation of the transmission system and, consequently, in the reliability of the electricity supply in the Luzon, Visayas and Mindanao grids. “It is the responsibility of NGCP to adequately serve generation companies, distribution utilities and suppliers requiring transmission service and/ or ancillary services through the transmission system,” the grid operator said. An ancillary service charge is recovered by NGCP from its load customers like DUs that, in turn, will bill end-consumers. NGCP said it was tasked to provide ancillary services to all transmission users of the main grids by the Electric Power Industry Reform Act of 2001 (Epira), its implementing rules and regulations, the Philippine Grid Code (PGC) and by Wholesale Electricity Spot Market (WESM) rules. NGCP is also mandated to implement the ERCpromulgated Ancillary Service Procurement Plan (ASPP) and the Ancillary Services Cost Recovery Mechanism (AS-CRM).
Ancillary services
How it all began
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IN a nutshell, ancillary services are essential in
IN October 2009 the ERC gave the National Power
Corp. (Napocor) provisional authority (PA) to charge the NGCP for the provision of ancillary service, pending approval of the Ancillary Services Procurement Agreement (ASPA) between Napocor and NGCP. A year later, in March 2010, the ERC made permanent the provisionally approved ASPA rate to be effective from the April 2008 billing period (March 26, 2008 to April 25, 2008) until the issuance of the PA on October 12, 2009. At the same time, the ERC directed Napocor and NGCP to submit additional recoverable AS differential, which is the difference between the ERC approved AS rate and Transco (National Transmission Corp.) calculated AS rate. They were also asked to submit a collection scheme for the April 2008 to October 2009 billing period. Napocor and the NGCP both complied. Napocor, in its compliance with manifestation, seeks to recover P6,048,276,707.00 in AS differential for the period. The NGCP, meanwhile, said in its compliance with manifestation that the AS differential amounts to P5,286,853,359.62. The grid operator also submitted its proposed billing and collection scheme of one month for the Luzon grid and six months for the Visayas and Mindanao grids. Then, in May 2011, Napocor filed its manifestation and motion for the ERC approval of the AS differential based on updated data submitted by NGCP. In that motion, Napocor noted the principal AS differential of P5,286,853,359.62 now reconciles with the amount submitted by NGCP. Accord-
ingly, in January 2012, Napocor filed before the ERC a motion to resolve its May 2011 manifestation and motion for the approval of the total AS differential amount of P6,888,065,922.01 composed of the principal AS differential, interest and VAT. “To date, Napocor and NGCP have fully complied with the requirements of the commission’s order to submit the recoverable AS differential amount and collection scheme from NGCP,” NGCP documents show. In the meantime, by virtue of the asset-debt transfer between Napocor and PSALM, and pursuant to section 49 of Epira, PSALM intervened in the proceeding through a petition for intervention in July 2009. “Consequently, as owner of all existing Napocor generation assets which provide NGCP with ancillary services, PSALM now comes before the commission and respectfully moves for the approval of the following: n Principal AS differential amount covering the April 2008 to October 2009 billing period amounting to P5,286,853,359.62; n Applicable legal interest; n Imposition of VAT on principal AS differential amount using the average Napocor AS mix covering the periods April 2008 to October 2009; n Collection of one month in Luzon grid and six months in the Visayas and Mindanao grids as proposed by NGCP,” PSALM said. “Wherefore, it is most respectfully prayed that the commission expediently issue an order,” the NGCP said.
news@businessmirror.com.ph
AseanMonday BusinessMirror
Editor: Max V. de Leon • Monday, March 28, 2016 A5
Malaysia fund spat with central bank flares over Zeti comments
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MALAYSIA Development Bhd. (1MDB), the state-owned fund linked to multiple probes, disputed comments by the central bank that it hadn’t properly explained its failure to repatriate $1.8 billion.
1MDB hasn’t received any official correspondence or confirmation from the central bank on the “specific matters” mentioned by Bank Negara Malaysia (BNM) Governor Zeti Akhtar Aziz and can’t comment further, it said in a statement late on Wednesday. After presenting her annual report, Zeti said the central bank is pursuing “appropriate administrative enforcement action” because the company didn’t show proof why
it couldn’t meet the order to bring the funds back. Bank Negara said last October its probe of 1MDB found inaccurate disclosures by the company, when it sought approvals for investments abroad, prompting the regulator to revoke the permissions given and instructing the repatriation of more than $1.8 billion related to multiple deals. It also proposed criminal proceedings against 1MDB,
something the attorney general dismissed, as it concluded there was no wrongdoing. “We will take the necessary action, because the main reason we want to do this is to uphold the integrity of the functioning of our financial system,” Zeti said on Wednesday. “The rules and regulations have been put in place to be compliant with—and all companies, regardless of who the shareholders are, have to comply with— these rules and regulations and that is where BNM is coming from.” Debt-ridden 1MDB, which has consistently denied wrongdoing, has been the subject of investigations by local agencies, including the central bank, as well as countries, such as Switzerland and Singapore, amid allegations of financial irregularities. Financial woes at the company, which included almost defaulting on a loan, led it
last year to announce plans to wind down much of its business. 1MDB, whose advisory board is chaired by Prime Minister Najib Razak, said last October that it was seeking a “viable resolution” with the central bank, even as the attorney general said the company didn’t commit any offense. The company said it is committed to helping the central bank with its probe. “ We h igh l ight t h at 1MDB has, in the course of the past 12 months, fully cooperated to the extent possible with BNM investigations, including providing documentary evidence were available,” the company said in the statement. “1MDB is committed to continued cooperation with BNM and will provide any further information that may be required by BNM, to the extent that 1MDB has in its possession or is possible under the law.” Bloomberg News
Cambodia’s zeal for rubber drives ethnic group from land
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OUSRA, Cambodia—For generations, the indigenous Bunong were famous as the elephant keepers and masters of the forests in eastern Cambodia. They called the fertile, rolling hills of their ancestral homeland ”meh ne,” or mother. From its rich red soil, they harvested rice, pumpkins and bananas. From the forests, they gathered honey, resin and medicinal plants. Under the leafy canopies, they buried their dead and worshipped spirits. That changed in 2008, when, without warning, bulldozers made way for rubber plantations the government granted to a European-Cambodian joint venture in poor, rural Mondulkiri province. Such economic land concessions were meant to promote development, but for 800
Bunong families, the long-term leases have brought mostly hardship and loss. The Cambodian human-rights group LICADHO estimates more than 200 state-linked land deals have harmed 500,000 people, and the UN has called land-rights-related conflicts Cambodia’s top human-rights problem. Josie Cohen, land campaigner at Global Witness, which investigates economic networks behind environmental destruction, said land leases are“altering the very fabric of rural societies”in Cambodia, and nearby Lao PDR and Myanmar. The Bunong of Bousra commune now must earn money to buy rice they once grew, and outsiders hold most of the plantation jobs. Despite promised development, many roads are still dirt. AP
Sanders wins big in Washington, Alaska caucuses
BusinessMirror
World The
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A6 | Monday, March 28, 2016 • Editor: Lyn Resurreccion
POPE Francis holds a white candle as he arrives for an Easter vigil service in Saint Peter’s Basilica at the Vatican on Saturday. AP/GREGORIO BORGIA
POPE FRANCIS’S EASTER MESSAGE AMID ATTACKS IN BELGIUM AND OTHER AREAS
‘Darkness, fear must not prevail’
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ATICAN CITY—Pope Francis concluded a bleak week in Europe with a message of hope during an Easter Vigil service on Saturday, saying darkness and fear must not prevail and “imprison” the world with pessimism.
Francis’s call to hope on the eve of the most joyful celebration on the Christian calendar contrasted sharply with his sharp condemnation in recent days of the attacks in Belgium and elsewhere by Islamic extremists. Francis entered the silent and darkened basilica with just a single
candle guiding him at the start of the vigil. As he reached the altar, the basilica’s floodlights flipped on in a symbolic show of light after the darkness of Good Friday, which recalls Jesus’ death. In his homily, Francis said the hope that Easter brings is a lesson for
the Christian faithful to cast aside the pessimism that can “imprison” people inside of themselves. “We see and will continue to see problems both inside and out. They will always be there,” he said. But he insisted: “Let us not allow darkness and fear to distract us and control our hearts.” “Today is the celebration of our hope,” he said. “It is so necessary today.” The Easter message recalling Christ’s resurrection, “awakens and resurrects hope in hearts burdened by sadness,” he said. The lengthy vigil service included a papal baptism for 12 adults hailing from China, South Korea and other countries around the world. Early Sunday, Francis will preside over Easter Mass and offer his annual Easter blessing. During remarks on Friday at the Colosseum capping the “Way of the
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People who were baptized by Pope Francis during the Easter Vigil rites.
Cross” procession reenacting Jesus’ crucifixion, Francis denounced the “terrorist acts committed by followers of some religions which profane the name of God and which use the holy name to justify their unprecedented violence.” While the pope was at the Colosseum, his chief alms-giver was out on the streets of Rome giving out
sleeping bags to the homeless on Friday night in a show of papal support for the city’s least fortunate. The call to hope on the eve of the most joyful celebration on the Christian calendar contrasted sharply with his condemnation of the attacks in Belgium and elsewhere by Islamic extremists. At the same time, Christians in the Holy Land and across the world are celebrating Easter, commemorating the day followers believe Jesus was resurrected in Jerusalem 2,000 years ago. The cavernous Holy Sepulcher church in Jerusalem was packed with worshippers on Sunday. The site is where Christians believe Jesus was crucified, buried and resurrected. A Mass is expected later in Bethlehem’s Nativity Church, built atop the site where Christians believe Jesus was born. AP
Syrian troops drive IS out of historic Palmyra B A A Associated Press
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THIS undated file image released by United Nations Educational, Scientific and Cultural Organization shows the site of the ancient city of Palmyra in Syria. Syrian government forces, with the support of Russian air strikes, recaptured Palmyra, an ancient town in central Syria, on Sunday from the Islamic State group. RON VAN OERS, UNESCO VIA AP
AMASCUS, Syria—Government forces backed by Russian air strikes drove Islamic State (IS) fighters from Palmyra on Sunday, state media and an opposition monitoring group said, ending the group’s reign of terror over a town whose famed 2,000-year-old ruins once attracted tens of thousands of visitors. Government forces had been on the offensive for nearly three weeks to try to retake the central town, which fell to the extremists last May. Their advance marks the latest setback suffered by IS, which has come under mounting pressure on several fronts in Iraq and Syria. State TV quoted an unnamed military
official as saying that “the armed forces and groups of popular defense committees have fully taken control of Palmyra.” The popular defense committees are militias allied with the government. The military official added that troops are now dismantling explosive booby traps planted by IS. The Britain-based Syrian Observatory for Human Rights confirmed IS has lost the town, saying there were many deaths among the extremists. It added that some of the extremists withdrew from Palmyra toward the town of Sukhna and other areas in Homs province. The Observatory’s chief Rami Abdurrahman said three weeks of fighting killed more than 400 IS fighters, as well as 180 troops and pro-government militiamen.
On Saturday Russia’s defense minister said Russian jets carried out 40 air sorties near Palmyra in the past day, hitting 158 targets and killing over 100 militants. Russian air strikes have helped President Bashar al-Assad’s forces advance on a number of fronts in recent months. Syrian state TV interrupted its normal programs to air a documentary about the town and its archaeological sites. The TV earlier aired national songs, as well as videos released earlier by IS showing its fighters committing atrocities in Syria and Iraq. “It’s 10 in the morning Palmyra time. Our morning is victorious,” a TV announcer said. Later a TV reporter spoke live from inside Palmyra, showing troops in the center of the town. Some of the nearby buildings had been reduced to rubble. AP
Easter delivery: Cargo ship arrives at space station C APE CANAVERAL, Florida—The six astronauts at the International Space Station got an early Easter treat this weekend with the arrival of a supply ship full of fresh food and experiments. Instead of the usual bunny, Saturday’s delivery came via a swan—Orbital ATK’s Cygnus capsule, named after the swan constellation. The cargo carrier rocketed away from Cape Canaveral on Tuesday night. National Aeronautics and Space Administration (Nasa) astronaut Timothy Kopra used the station’s big robot arm to grab the capsule, as the two craft soared 400 kilometers above the Indian Ocean. “Excellent work, gentlemen,” Mission
Control radioed. Four hours later, the capsule was bolted firmly to the complex. It’s the first of three shipments coming up in quick succession. A Russian cargo ship will lift off on Thursday, followed by a SpaceX supply run on April 8. Nasa has turned to private industry to keep the space station stocked. The newly arrived Cygnus holds nearly 3,600 kilograms of groceries, equipment and research. Among the newfangled science: robotic grippers modeled after geckos’ feet and the ingredients for a largescale, controlled fire. A commercial-quality 3D printer is packed inside, as well; anyone will be able
ORBITAL ATK’s Cygnus cargo ship (top) approaches the International Space Station on Saturday. The cargo carrier was launched from Cape Canaveral on Tuesday. NASA VIA AP
to order prints, for a price, from the Made In Space company. Virginia-based Orbital ATK hints Easter eggs may also be onboard. The blaze—confined to a box inside the Cygnus—won’t be set until the capsule departs in May with a load of trash. Nasa researchers want to see how fast the cottonfiberglass fabric burns, in hopes of improving future spacecraft safety. Following the experiment, the capsule will burn up, for real, during re-entry. As it turns out, the Cygnus had an outof-the-ordinary ride to orbit. The first-stage booster of the normally reliable unmanned Atlas V rocket stopped firing six seconds early, and the upper stage had to compen-
sate by burning a minute longer, to get the capsule in the right orbit. Rocket maker United Launch Alliance has delayed its next launch, a military satellite mission, to figure out what went wrong. The commander of the doomed space shuttle Columbia, meanwhile, is being honored with this latest delivery. Orbital ATK named this Cygnus after Rick Husband, who piloted the first shuttle docking at the space station in 1999. He died aboard Columbia during reentry in 2003, along with six other astronauts. Kopra called him a “personal hero” and said he was honored to welcome the “S.S. Rick Husband” aboard. AP
EATTLE—Bernie Sanders won a landslide victory in Washington’s Democratic caucuses on Saturday, beating rival Hillary Clinton by a 3-to-1 margin. Heavy turnout overwhelmed some caucus locations and sent participants spilling into parking lots and parks to complete voting on the sunny spring day. State Democratic Party officials said the caucuses could reach 2008’s record turnout of 250,000. By midafternoon, Sanders led with 76 percent of the statewide delegate count, compared with 24 percent for Clinton, with 31 percent of precincts reporting. The Associated Press called the race at 3:28 p.m. PDT. From midmorning on, reports rolled in all over Washington that Sanders was winning in a romp and was likely to grab the lion’s share of 101 pledged delegates up for grabs based on the results. He was declared the winner in Alaska’s caucuses by a wide margin. Hawaii Democrats also were holding caucuses on Saturday. “We knew things were going to improve when we headed west,” Sanders told a jubilant crowd at a campaign rally in Madison, Wisconsin, as the results were announced. While trailing Clinton overall, Sanders said “we have a path towards victory,” and said it was “hard for anyone to deny that our campaign has the momentum.” Sanders had counted on high turnout to propel him to a badly needed victory to stay viable in the Democratic contest with Clinton. Sanders held five rallies in the state over the past week, ending with a speech to 15,000 supporters at Seattle’s Safeco Field Friday night. Clinton also campaigned in Washington on Tuesday, but she held smaller events and did not try to match Sanders’s barrage of TV and radio ads. Her advisers conceded she was likely to lose in Washington but hoped to walk away with a share of delegates. The apparent win by Sanders went against the support of top elected Democrats who largely backed Clinton. From Bainbridge Island, Gov. Jay Inslee posted a “selfie” on Facebook of he and his wife Trudi, who both caucused for Clinton. “We have two great candidates, but I was proud to caucus for Hillary Clinton today…. It was energizing to see so many Democrats passionate and engaged in electing a Democrat this November and beating Donald Trump,” Inslee wrote. In hundreds of schools, libraries and community centers across the state, neighbors engaged in passionate debates over the merits of Clinton versus Sanders. A few minutes before the end of a Seattle caucus at Martin Luther King Jr. Elementary, a small crowd gathered around two undecided voters, Annie Kunkel and Hana Peoples, each of whom had the power to break a 21-21 tie in one precinct. “I hear your argument about Hillary being a woman,” Kunkel told a woman trying to sway her. “My whole life I’ve waited for that opportunity.” At the last second, though, Kunkel cast her vote for Sanders. Just as President Barack Obama had made people believe in hope, even if Sanders couldn’t accomplish everything he wanted, Sanders was making people believe that “what’s in your heart matters,” she said. Peoples, in contrast, could not be moved in any direction. A 22-year-old student at the University of Washington, she said she wasn’t convinced either candidate was looking out for students of color. “Even at this caucus, not a lot of people look like me,” said Peoples, who is of African-American and Japanese descent. While the caucus was located in the racially diverse but gentrifying Rainier Valley, most of those who turned out were white. At Edmonds-Woodway High School in Snohomish County, Marian Squibb, 90, was the first caucus goer to show up. She parked her car at 8 a.m. after a short drive from her retirement home. “My husband and I always voted Republican,” she said. “This is my first time ever [caucusing as a Democrat].” Squibb, who was leaning toward Sanders, said her adult children are Democrats and were surprised when they heard she’d be turning blue for the weekend. “I’ve been getting a little concerned about religion in politics on the Republican side,” she said. “And I don’t care for the Republican candidates this time around. Trump, he’s the worst. His language, he shouldn’t be using it.” Squibb wore a special T-shirt for her first brush with the Democratic Party. It read, “I’m going on an adventure.” TNS
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The World BusinessMirror
Monday, March 28, 2016
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Obama says others will follow in his path to Cuba
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AVANA—If the president can take his family to Cuba, other Americans will want to follow. And if blue-chip companies, such as Google and Starwood, are opening there for business, so will other companies. More important than any diplomatic negotiation during President Barack Obama’s visit are images from his visit, which, the administration says, solidify public perceptions of the changed relationship with Cuba: Obama, his wife and their daughters, among palm trees and vintage cars, taking in a baseball game and touring colonial cultural sites. The visit for most Americans will end the “taboo” on a country that was long legally off-limits to most US citizens and demolish remaining psychological barriers to travel to the island and do business there, said Rep. Mark Sanford, a South Carolina Republican who was part of the US delegation with
the president in Cuba this week. It hasn’t removed—though it may yet erode—resistance from many other Republican lawmakers and some Cuban exiles to removing one of the last remnants of a hostile relationship: the US trade embargo with Cuba imposed more than a half-century ago. While the thaw will continue after he leaves office, the president has acknowledged the embargo most likely will, as well. The official purpose of Obama’s trip, which included a stop in Argentina, was to reset the US relationship with Latin America and, in the president’s words, to “bury the last remnant of the Cold War in the Americas.”
There was a heavy dose of symbolism, as well. Residents of Latin America, where US isolation of Cuba has been a constant irritant, saw Obama and Cuban President Raul Castro chatting amiably during a baseball game. At public appearances, Obama delivered tough criticism on human-rights abuses without using a confrontational tone. Putting punctuation on the idea that it’s a new era, he said the Cuban Revolution happened the same year his father came to the United States from Kenya and that the Bay of Pigs invasion occurred the year he was born, in 1961. In Buenos Aires Obama stood side by side with Argentine President Mauricio Macri on Thursday to pay tribute to the thousands of victims of what is known as the Dirty War and said he regrets that the US was too slow to speak out about the abuses of Argentina’s military government in the 1970s and 1980s. The night before, at a state dinner hosted by Macri, Obama was persuaded, after initially expressing reluctance, to engage in a brief tango with a female entertainer. Some of those symbolic gestures, particularly coming after the terrorist attack in Brussels, drew criticism.
“Baseball games and tangos, that’s inconsistent with the seriousness of the day,” Richard Haass, president of the Council on Foreign Relations, said on MSNBC’s Morning Joe. Obama shrugged off the criticism. He said allowing terrorists to disrupt the work of building US relationships in the world plays into their hands. The easy rapport Obama showed with Castro and the respectful treatment the US president accorded his counterpart amplifies the impact of Obama’s opening to Cuba, said Jonathan Hansen, a senior lecturer of Latin American studies at Harvard University and a biographer of Cuban leader Fidel Castro, Raul’s brother. “Not every country loves Castro, but Castro is important in every country in the region,” Hansen said. “He symbolized an absolute unwillingness to compromise on self-determination and sovereignty.” Obama’s statement that Cuba need not fear US aggression and that both countries can learn from each other, will echo in a region that has often chafed at perceptions of US hegemony, he said. “The symbolism of him saying you have something to teach us on the delivery of social services, health policy and education, is tremendous,” Han-
sen added. “That’s unheard of coming from an American president in recent Latin American history.” In the US the psychological shift that the trip accelerates, and a parallel one among corporate leaders, will render Obama’s opening to Cuba irreversible, Sanford said. It also builds an expanding constituency for dropping the embargo, he said. The visit’s potential impact is all the more powerful coming just as the Obama administration has all but eliminated the bureaucratic obstacles to travel. Though the US embargo law still only permits travel to Cuba for certain purposes, such as journalism, education or people-to-people exchanges, Americans no longer need to provide detailed itineraries or go through cumbersome processes. Instead, travelers simply check a box on a form indicating the purpose of their trip at the airport as they depart the US. US airlines also will begin direct scheduled flights to Cuba later this year, ending the inconvenience of having to fly on a charter flight or go through a third country. The airlines also will become a powerful corporate interest opposed to hindrances to travel, Sanford said.
The deal announcements coming from major companies timed to Obama’s visit also reduce anxieties over Cuba in corporate suites elsewhere. Starwood Hotels and Resorts Worldwide Inc. announced an agreement to operate three hotels in Cuba and make a multimillion-dollar investment to bring them up to Starwood standards. Google Inc. announced plans to open an onlinetechnology center in Havana offering faster Internet wireless access. General Electric Co. signed memorandums of understanding with the Cuban government on business collaboration amid reports it is exploring sales of power and medical equipment to Cuba. The trip yielded formal accords such as a US-Cuba agreement on agricultural cooperation and a plan for medical collaboration to combat Zika virus and cancer. “It doesn’t have that immediate kind of impact, but things will change immeasurably moving forward,” said US Rep. Xavier Becerra, a California Democrat, on the trip’s congressional delegation. As Obama was wrapping up his final day on the island, Becerra said the visit would be another turning point in US-Cuba relations. Bloomberg News /TNS
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Monday, March 28, 2016
The World BusinessMirror
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3 suspects in Brussels attacks charged with terrorist offenses
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RUSSELS—Three suspects detained earlier last week have been charged with terrorist activities, prosecutors in Belgium said on Saturday, as investigators in this tense capital continue to track down leads from the deadly bombings targeting the airport and metro.
IN this image provided by the Belgian Federal Police in Brussels on March 22 shows three men who are suspected of taking part in the attacks at Belgium’s Zaventem Airport and are being sought by the police. The man on the left was unidentified as one of the suicide bombers, the man at center has been the identified by the Federal Prosecutors Office on March 23 as Ibrahim El Bakraoui. Belgian media outlets have cited sources saying the man on the right as Faycal C. who was arrested on Thursday. BELGIAN FEDERAL POLICE VIA AP
Media reports here linked one of the three men to Tuesday’s suicide attack at the Brussels airport, but there was no official confirmation from the authorities. A suspect, who is believed to have escaped from the scene, has been the focus of a major police manhunt. At least four Islamist e x t rem i st s took pa r t i n t he bombings at the airport and on a crowded metro train on Tuesday that together killed 31 people and injured more than 250 in the latest terror strikes to stun Europe. Three suicide bombers are known to have died in the attacks, authorities say. Four A mericans have been confirmed as among the dead. Justin Shults and his wife, Stephanie, were killed in the bombing at the airport, according to a statement issued on Saturday by his employer, Clarcor. Shults, who was originally from Gatlinburg, Tennessee, and his wife, a Lexington, Kentucky native, had lived in Brussels since 2014 and were reportedly dropping Stephanie’s mother off at the airport when the bombs were detonated. A brother and sister from New York, Alexander, 29, and Sascha, 26, Pinczowski, also died at the airport, officials confirmed on Friday. Organizers called off a public “march against fear” scheduled for Easter Sunday in Brussels at the request of Belgian authorities. The city remains on high alert, and officials asked that the march be canceled so that police could focus
on the ongoing investigation. Belgian prosecutors did not specify what role any of the three suspects now under arrest may have played in this week’s strikes or in any other plots. In a statement on Saturday, the federal prosecutor’s office said that investigation of the Brussels attacks had resulted in the formal arrest of a man identified only as Faycal C. He was placed in custody on suspicion of “participation in the activities of a terrorist group, terrorist killings and attempted terrorist killings.” A search of the suspect’s home turned up no arms or explosives, prosecutors said. The suspect was picked up on Thursday near t he ma in justice bui ld ing in downtown Brussels. Belgian media outlets have cited sources saying that Faycal C. was the accomplice who escaped from the air por t on Tuesday. Various media accounts here identified the man as Faycal Cheffou, described as a freelance video journalist. Prosecutors identified the two other suspects charged with “participation in the activities of a terrorist group” as Rabah N. and Aboubakar A. The arrest of Rabah N. was linked to an arrest in France on Thursday of a suspect allegedly plotting an attack in that country. No further details about the men were released. A fourth man swept up in a series of raids in recent days, identified only as Abderamane A., had his
detention extended for another 24 hours, authorities said. Investigators believe that a large cell of Belgian and French nationals, mostly of Moroccan ancestry, was behind both this week’s attacks in Belgium and last November’s strikes on Paris nightspots that killed 130 people. The Paris killing rampage may have been conceived and plotted in Belgium, authorities say. On Friday Belgian prosecutors finally confirmed the most definitive link to date between the Brussels and Paris attacks, declaring that one of the two suicide bombers at the airport was Najim Laachraoui, 24, a Belgian fugitive who had traveled to Syria in 2013. His DNA was also found on two of the bombs used in the Paris attacks, the prosecutors said. US authorities had already said that Laachraoui, an electrical engineer and suspected bomb-maker, was a key participant in both the Brussels and Paris assaults. Belgian authorities, facing considerable criticism for what some call their lax handling of the terror threat, have been under pressure to find the missing airport attacker. The normally staid capital, which is also the de facto capital of the European Union, has seen near-daily police raids of homes by antiterror police wearing ski masks and toting rifles. The escaped airport plotter was recorded on closed-circuit television moments before Tuesday’s attack, wearing a tan jacket and dark cap as he pushed a luggage trolley alongside two other men later identified as suicide bombers. Authorities released the grainy image in a bid to help find the fugitive. It was unclear if he also intended to blow himself up but backed out at the last moment, or his device failed, or whether the plan called for him to depart from the airport after leaving a bag of bomb materials behind. On Friday Belgian police swept through several neighborhoods in the capital, arresting three suspects. One of them was shot in the leg as he was taken into custody in broad daylight at a tram stop in the Schaerbeek district, the same neighborhood where the airport bombers had turned a rented flat into an apparent bomb-assembly factory, authorities said. The police say the apartment, which was discovered after the bombings, also contained a flag of Islamic State, the al-Qaeda breakaway group that has claimed credit for the Brussels attacks and last November’s mayhem in Paris. In dramatic amateur footage pu r por t i ng to show Fr id ay ’s arrest in Schaerbeek, police with rifles drawn are seen approaching a man who is lying, apparently inju red, on a t ra m pl at for m littered with broken glass. The police escort a child away from the man before backing off.
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Persons killed at suicide bombings at Brussels airport and metro last week
The man is seen clutching a bag as a bomb-disposal robot approaches. Witnesses quoted in local media said the robot removed the bag from the scene. the Police later dragged the man away; reports indicated he had been shot in the leg. Several explosions heard in the area were described as controlled detonations. On Saturday the prosecutor’s of f ice identif ied t he man as Abderamane A. His detention was extended 24 hours but no for ma l charges had yet been brought against him, according to prosecutors. Belgian officials said Friday’s raids were not linked to Tuesday’s attacks, but rather to a foiled plot in France disclosed on Thursday as the police outside Paris arrested Reda Kriket, a 34-year-old French citizen with links to French-Belgian Islamist extremist networks. French Interior Minister Bernard Cazeneuve said the arrest disrupted a plot that was in its “advanced stages.” Last year Kriket was convicted in absentia in a terror case in Beligum along with Abdelhamid Abaaoud, a Belgian national who later was named as the ringleader of last November’s attacks in Paris. Abaaoud was killed in a shootout with French police days after the November attacks. In the wake of this week’s bombings, Belgian authorities have come under withering criticism for the nation’s failure to thwart the assaults despite numerous signs of a homegrown terrorist network on Belgian soil. The prime minister turned down offers from two ministers to resign after reports surfaced that one of the airport suicide bombers, Ibrahim El Bakraoui, had been expelled from Turkey in June on suspicion of terrorist activity, but the Belgian authorities had not taken any action against him. During a Belgian parliament a r y comm ission hea r ing on Friday, Interior Minister Jan Jambon—one of the Cabinet members whose offer to resign was turned down—said a Belgian federal police liaison officer in Turkey had made a “serious blunder” by not following up on the case. The officer, who was not identified, would face disciplinary measures, the minister said. Los Angeles Times/TNS
Iran’s leader wants to resolve Saudi tensions
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SLAMABAD—Iran’s President Hassan Rouhani said on Saturday Tehran was not interested in maintaining tensions with Saudi Arabia and responded positively when Pakistan tried to mediate between the two rivals. Speaking at a news conference in Islamabad to mark the end of h is t wo - d ay v isit to Pakistan, Rouhani said Saudi plays an important role in the Muslim world and that “if there is any problem between two
countries, it should be resolved through talks.” “Iran’s nuclear pact is an example for the world. We have overcome problems through dialogues,” he said. Pakistan is a key ally of Saudi Arabia and shares a long border with Iran. The trip was Rouhani’s first visit to Pakistan, and followed efforts by Saudi Arabia to court Islamabad to increase its participation in a new Saudi-led military alliance of mostly Sunni nations, a coalition perceived by
Tehran as an anti-Shiite block. The kingdom has accused Tehran of supporting Shiite Houthi rebels in Yemen against the internationally recognized President Abed Rabbo Mansour Hadi. Saudi Arabia has been leading a coalition of mostly Gulf Arab states in strikes against the Houthis. Despite Saudi pressure, Islamabad last year refused to send troops into Yemen. Pakistani Prime Minister Nawaz Sharif visited Saudi Arabia and Iran in
January to mediate between the two regional powers. Rouhani also said his country was ready to help Pakistan overcome its energy problems. “Iran has constructed a gas pipeline up to the Pakistani border and now we are ready to provide gas to Pakistan,” he said, adding that he hoped Pakistan would complete the pipeline on its side. Work on the Pakistan-Iran pipeline has been stalled for years because of sanctions on Iran, which invested over $2 billion in the project. AP
PEOPLE gather at floral tributes at a memorial site at the Place de la Bourse in Brussels on Saturday. Brussels airport officials say flights won’t resume before Tuesday as they assess the damage caused by twin explosions in the terminal earlier this week. AP/GEERT VANDEN WIJNGAERT
Brussels attack victims came from many parts of the world
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RUSSELS—Victims of the attacks on Brussels’ airport and subway included commuters heading to work and travelers setting off on longanticipated vacations. In a city that’s home to international institutions, including the European Union (EU) and North Atlantic Treaty Organization, they came from Belgium and around the world.
Among the confirmed dead:
Gigi Adam said her 79-year-old father Andre
Adam died trying to protect his wife during the attack on Brussels airport. Adam was a retired Belgian diplomat who had served as his country’s ambassador to Cuba, the United States, the United Nations and other countries. “His death has wounded us all forever,” Gigi Adam wrote on Facebook. “All his life he had worked toward the peaceful resolution of conflict in the world.” She described her late father as “a cultured and cheerful man” who had met his future wife—”the love of his life”—on his posting to Cuba in the early 1960s. She said on Facebook that her mother had been hospitalized after the attack. Gigi Adam said her parents had retired to southwest France in recent years. “He was a loving father and an adored grandfather,” she said, asking for his family members to be given privacy. “We need to rest.”
A missing American couple have been identified as victims of the attack at the Brussels airport, according to their employers. Justin Shults, 30, and his wife Stephanie Shults, had not been seen since on Tuesday. Her employer Mars Inc., said in a Facebook post on Saturday evening that her family had confirmed that she and her husband died in the bombings at the Brussels airport. Justin Shults’ employer, Clarcor, had confirmed earlier Saturday that he died in the attack. Justin Shults, originally from Gatlinburg, Tennessee, and his wife, a Lexington, Kentucky, native, graduated together from Vanderbilt University’s Owen Graduate School of Management. They were dropping Stephanie’s mother off at the airport and were watching her walk through security when the bombs went off, a family member said. Justin Shults’ brother, Levi Sutton, wrote on social media on Saturday that his brother “traveled the world, leaving each destination better than when he arrived.” Patricia Rizzo’s family hails from a tiny town in Sicily, but she was as broadly European as they come. Born in Belgium to a family originally from Calascibetta, near Enna, Sicily, Rizzo graduated from a Belgian university and worked for several Belgian companies as an executive secretary before joining European institutions in 1995. The Italian Foreign Ministry confirmed on Friday that Rizzo, 48, was among the dead from the attack on the Brussels subway at Maelbeek. “Unfortunately, Patricia is no longer with us,” a man who identified himself as Rizzo’s cousin, Massimo Leonora, wrote on Facebook. His final post capped days of anxious updates recounting his search of Brussels hospitals in hopes that Rizzo might have been among the injured. “It’s difficult, but at least now we’re beyond this unending race against time to find you.” Rizzo moved back to Italy from 2003 to 2008 to work as the assistant to the executive director of the European Food Safety Authority. In 2008 she was named human resources
assistant for the EU’s education and culture agency in Brussels and for the past five months had worked in the human-resources department of the European Research Council (ERC). “After a few days of excruciating waiting and angst, our worst fears have been confirmed,” the ERC’s executive leadership said on Saturday, praising Rizzo’s energy, attitude and spirit. The Research Council said Rizzo is survived by a son and her parents. Jennifer Scintu Waetzmann was a coach for a youth handball club in Aachen, Germany. Her uncle, Claudio Scinto, told the German newspaper Bild that she and her husband were checking in on Tuesday morning at Brussels Airport en route to a belated honeymoon in New York when the first bomb exploded. The blast killed her and left her husband, Lars Waetzmann, among the 270 wounded in Brussels. Her final post on Facebook came right after the November extremist assaults on Paris. It said: “Pray for Paris.” Other pictures show her and her husband in romantic seaside settings with the inscription: “Love of my life.” German Interior Minister Thomas de Maiziere said on Friday his thoughts are with Waetzmann’s family and vowed Germany “will not rest until the murderers and those who aided them are held responsible.” Elita Borbor Weah, who was heading to Rhode Island for her stepfather’s funeral, had texted family members a photo of herself on Tuesday at Brussels Airport. A short time later, two suicide bombers struck the airport, leaving Weah among their victims. The 40-year-old had been living in the Netherlands with her 13-year-old daughter after her extended family from Liberia had dispersed across West Africa, Europe and the United States following Liberia’s civil wars. Her brother Oscar Weah of Providence, Rhode Island, was shaking and in tears on Friday as he described how his older sister helped care for him over the years. Other relatives also sang her praises. “She had a good heart,” said 14-year-old niece Eden Weah. “She was always worried about everybody.” Now, in addition to holding a funeral for her 87-year-old stepfather, the family was making arrangements to care for her teenage daughter. DAVID DIXON had texted family members
to say he was safe after two bombs severely damaged Brussels airport, but he was killed shortly after when a bomber attacked the subway system. Dixon, 53, a British citizen, was working as a computer programmer at the time of his death, which was confirmed on Friday by Britain’s Foreign Office. Friends and family had been searching for him since he failed to arrive at work on Tuesday morning in the hours after the bomb attacks. Press reports indicated he lived in Brussels with his partner and their son. “This morning we received the most terrible and devastating news about our beloved David,” said a statement sent out by officials on behalf of Dixon’s family on Friday. “At this most painful time, our family would gratefully appreciate it if we could be left alone to grieve in private.” Prime Minister David Cameron said he was “deeply saddened” by the death of Dixon, who was originally from Hartlepool, in northeastern England. AP
Tourism&Entertainment BusinessMirror
A10 Monday, March 28, 2016
Editor: Carla Mortel-Baricaua
LA UNION BEYOND SURFING
SUNSET at Urbiztondo, San Juan, La Union
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OME say you have never been to La Union if you did not surf. Understandably so, many of those who travel to this coastal province are drawn to its clean, soaring waves—notably those in the neighboring towns of San Juan and Bacnotan. But beyond the great swells pounding on its coasts await a bevy of untapped adventures, all as pulse-quickening and as refreshing as its 8-foot waves. And we discovered them as we, the small community of media practitioners, journeyed aboard an animated bus for The North Luzon Expressway (Nlex) Lakbay Norte 5. Now on its fifth year, Nlex Lakbay Norte is an annual media-familiarization tour that aims to showcase less-trodden destinations in northern Luzon. It is hatched by the North Philippines Visitors Bureau, Manila North Tollways Corp., and North Luzon Expressway, in partnership with Department of Tourism Region 1, local visitors bureaus, Petron, Victory Liner, and sponsoring hotels and restaurants
Appreciate local art at La Union Art Gallery
RESTING quietly in the Lupac building amid the bustling streets of the capitol, Silidti Adal ken Laing ti La Union, or simply La Union Culture and Art Gallery, cradles La Union’s thriving art scenery. Here, visitors can marvel at a plethora of wood sculptures and paintings handcrafted by La Union’s artists. The nonprofit gallery houses a beautiful mix of sunset and mother-and-child paintings, as well as a gigantic 3D shark painting, previously of Surf Break fame.
San Gabriel’s outdoor gems
SET deep in the lush forests of San Gabriel, Tangadan Falls can be accessed after a breezy 20-minute jeepney ride through the Caraballo mountainside, and another 20-min-
FORTY-FOOT cascades of Tangadan Falls in San Gabriel, La Union.
ute trek through tree-lined trails. On weekends, locals and tourists tread this lesser-known road to take a refreshing dip, ride a bamboo raft, or simply enjoy home-cooked meals in thatched huts. Tangadan Falls’ 40-foot twin cascades plunge through a glassy and wintry basin. Atop these towering cascades is a smaller 7-foot-deep basin, which also serves as a jump-off spot for cliff diving.
close to the party, book one of newly installed rooms at G Hotel on the third floor.
Home right on the beachfront
THE La Union Honeybee Center is the largest apiculture farm in the region
Hearty Ilocano fare across towns
AN underrated gustatory treat, we found out that La Union is home to many kitchen secrets—salty crab paste and charcoal grilling included. San Fernando, in particular, holds secrets that stay in memory and tug the heartstrings long after tasting what it has to offer. Among these is Mommy Lu’s, a 15-year-old family-owned culinary institution. Arguably the most popular restaurant in the capitol, it serves sumptuous pinakbet generously topped with crispy bagnet, and the best lengua in town, which is a melt-in-your-mouth goodness lingering long in the palate. Just a few minutes away from Mommy Lu’s is L.U. BBQ, a casual diner that doubles as a performance arts venue for local artists. A play on lutonguling (charcoal), L.U. BBQ’s house specialty is its affordable, moist and charcoalgrilled meats, from Insarabasab (liempo) slabs to charbroiled barbecue burgers. Along the seaside restaurant row in Barangay Pagudpud lies the charming and earthy Natalna Grille, whose house specialty pulpog marries
MAD Monkeys is a homey joint for enjoying ice-cold beer and juicy burgers.
bee. The La Union Honeybee Center takes visitors on an insightful journey of apiculture, from bee to bottle, culminating in a taste-test of pure, raw honey fresh off the honeycomb.
Surfer-inspired bar crawl experience WOODEN sculpture at La Union Art Gallery, crafted by La Union’s artists.
the smoky flavors of char-grilled liempo and the tanginess of sisig. For appetizers, be sure to order nachos, kanifurai and chicharon bulaklak. A play on the signature Filipino kubÔ, Cube-O Grill in farther San Juan is fashioned in native-themed elements—both in design and food offerings. The Cube-O Salo-Salo —a platter of dinakdakan, bagnet-sprinkled pinakbet and fried fish fillet laid on fresh banana leaves—is a delectable grub that should rank high in your food choices, especially if you’re a party of six.
Hit the sweet spot at The Honeybee Center
APART from beginner-friendly swells, the town of Bacnotan—a 20-minute drive from San Juan— also hosts the region’s largest honey-
THE epitome of laid-back, a tour of San Juan is best capped off with an after-sundown bar crawl. Among the glowing trail of street bars is Mad Monkeys, a modest joint serving icecold beer; thick, juicy burgers and cupped fries, both deliciously paired with Mad Monkeys’ special sauce. Next-door neighbor Surf Shack is a place for enjoying bespoke cocktails, local craft beers and thin-crust pizzas with a local flair, like tuyo and longganisa pizzas. Monochrome portraits, graffiti, mounted surfboards and crochetdonning trees provide an interesting backdrop as one listens to live music in this artsy space. Part of the dizzying collection of food hubs in Planet G, Click caters to party-frenzied bar hoppers who prefer funky trip-hop and electronica in a clubbing atmosphere (and awesome card tricks, courtesy of the resident barista). If you want to stay
ON the other hand, if you’d rather come home to the sight and sound of ebb, the seafront resorts at San Juan are the perfect spot. Kahuna Beach Resort and Spa features opulent Balinese-themed accommodations, some with their own infinity pools and walk-in closets. One of the more up-market hotels along the Urbiztondo strip,
the resort sits at the heart of surfing action where sand, swell and sunsets converge. For more intimate accommodations, head to nearby La Roca Villa Resort. Reminiscent of Spanish architecture, this two-story hotel offers roomy, well-equipped villas and quirky spaces filled with cacti and Spanish art, perfectly complemented by beautiful rock pools along the beach. Some say that you have never been to La Union if you haven’t surfed. For a time, I believed that. But I know better now.
Seda launches loyalty program for guests
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N response to the warm reception of its five properties throughout the Philippines, Seda hotels, the wholly owned AyalaLand Hotels and Resorts chain, recently launched CLIQ, which is its rewards program. Andrea Mastellone, group general manager of Seda, said that the chain’s average occupancy rates throughout the country, which exceeded industry standards in 2015, prompted the creation of this loyalty scheme for customers. Open to all Seda guests, CLIQ is an avenue to earn overnight stays at Seda hotels, in exchange for rewards points. For every P10 spent on rooms, a CLIQ member earns a reward point. Repeated bookings will eventually mean free overnight stays. “CLIQ is our way of giving back to guests who have shown appreciation
for our high quality of service, by staying with us whenever they can in their travels,” Mastellone said. CLIQ membership is open to all guests and means free access to the Seda reservation hotline. All guests who accumulate at least 15 nights in any of Seda’s five properties within 12 months automatically get upgraded to the CLIQ Premier level and earn extra privileges, such as guaranteed room availability for reservations made 72 hours prior to arrival, early check in and late checkout, subject to availability, and a 10-percent discount on the hotel’s restaurant and bar, as well as an additional 10-percent earned points. Bookings made through third-party sellers and food and beverage bills do not merit CLIQ points. Members only earn points for the rooms they occupy.
Science Monday BusinessMirror
A12 Monday, March 28, 2016
Editor: Lyn Resurreccion • www.businessmirror.com.ph
PHL to host intl tilt for the gifted in science
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HE Philippines will host an international competition for the gifted in science from June 13 to 18 at the University of the Philippines Los Baños. Dubbed the “5th Asean Plus Three Junior Science Odyssey” (APTJSO), the competition will have contestants from 13 countries vying for the top which, throughout the tilt’s history, has been dominated by Philippine delegates. The fifth APTJSO is a six-day education event that will allow the gifted students from the 10 Asean member-countries (Myanmar, Laos, Thailand, Vietnam, Cambodia, Brunei Darussalam, Malaysia, Singapore, Indonesia and the Philippines), plus three countries, such as Japan, South Korea and China, to interact with experts in climate science and put their scientific skills to test with their colleagues. Participating in the event are gifted junior high-school students in science from the said countries. Contestants will hurdle three activities, namely, poster presentations, laboratory-skills assessments and group project presentation.
Meanwhile, the APTJSO is also a venue for teachers to share and experience innovations in teaching science and technology. This year’s theme, “Climate Change and the Rainforest,” will anchor the competition’s activities. Started in 2010, the APTJSO is an annual educational event in the field of science and technology (S&T) for young students between 13 and 15 years of age. This event is designed specifically to develop the gifted and talented young individuals in the field of S&T, and to nurture future scientists and engineers. Moreover, the competition aims to stimulate student’s intellectual curiosity through various experience and experiments, and encourage them to excel in S&T. Despite the highly competitive nature of the APTJSO, it actually provides students the opportunity to foster friendship and networking in the region. The fifth APTJSO is a joint activity of the Asean+3 Center for the Gifted in Science and the Science Education Institute of the Department of Science and Technology, in cooperation with UP Los Baños. S&T Media Service
Participants in 83rd scientific assembly highest in recent years
AN Indian woman stands in front of an air cooler to cool herself on a hot summer day in Hyderabad, in the southern Indian state of Telangana. Hotter weather appears to be here to stay, El Niño or not, the United Nations weather agency says, warning the Paris climate accord last year shouldn’t give way to complacency about global warming. AP/MAHESH KUMAR A.
New normal: Hotter world temperatures G
THE recent annual scientific conference of the National Research Council of the Philippines (NRCP) at the Philippine International Convention Center, in Pasay City. (Clockwise, from top left) Ribbon-cutting ceremony of the posters exhibit with Science Secretary Mario G. Montejo and NRCP officials and keynote speaker Ion Exchange India President and General Manager Rajesh Sharma; “Putong” ceremonies for NRCP Achievement awardees; and conference participants. GERARDO PALAD, S&T MEDIA SERVICE
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TOTAL of 808 participants, composed of scientists, researchers, social scientists and other academic and science and technology practitioners, attended the recent Annual Scientific Conference and 83rd General Membership Assembly of the National Research Council of the Philippines (NRCP)—the biggest turnout in the last five years. Specifically, 624 regular and associate NRCP members; 87 nonmember attendees, consisted of agency officials, resource speakers, research practitioners and guests; and 97 nontechnical personnel, consisted of NRCP staff, technicians and members of the media, participated in the recent annual conference at the Philippine International Convention Center in Pasay City. According to Executive Director Dr. Marieta Bañez Sumagaysay, the excellent turnout this year may be indicative of researchers’ sustained interest in general prospects, as well as the direction of local research and development, with their desire to integrate, realign and contribute to address various pressing issues within and among specific academic disciplines. The NRCP is the Philippine government’s arm in basic research under the Department of Science and Technology (DOST), and acts as a policy advisory body for issues of national interest. With the theme “Research Innovation for Inclusive Development,” the conference featured plenary speaker Rajesh Sharma, chairman and managing director of one of India’s leading technology companies, Ion Exchange India (IEI). His speech was entitled “Research Innovation in Emerging Technologies for Sustainable and Inclusive Devel-
opment.” Scientific breakout sessions were also conducted during the conference. They include ReEngineering Research for Inclusive Nation-Building, by National Artist Ramon Santos; Science Education for Inclusive Development, by Dr. Josette T. Biyo, DOST Science Education Institute executive director; Innovative Strategies in Teaching Sciences to Filipino Students Toward Rapid Economic Growth and Global Competitiveness, by Engr. Filemon T. Berba Jr., Philippine Foundation for Science and Technology president; Enhancing Competitiveness and Inclusive Growth in the Natural Products Industry through Research and Innovation: An Out-of-the-Box Approach, by Philip S. Cruz, Herbanext Laboratories Inc. president; and Innovations of the Business Industry Sectors to Combat the Perils of Food Insecurity, by Dr. Robert H. Lo, Red Dragon Farm president and general manager. The NRCP conferred awards and recognition to 22 individuals for their achievements in research and significant contributions in their respective fields, along with four local research institutions adjudged to have epitomized excellence in 2015. The Philippine Atmospheric, Geophysical and Astronomical Services Administration of the DOST was among the recipients of the four institutional awards of the NRCP. Other activities during the assembly were the election of new chairmen of several scientific divisions to lead member activities for the next two years; oath-taking of new associate and regular members; annual reports of the NRCP president and treasurer; scientific poster contest and exhibit. S&T Media Service
ENEVA—Hotter weather appears to be here to stay, El Niño or not, the United Nations weather agency said, warning that the Paris climate accord last year should not give way to complacency about global warming.
The World Meteorological Organization (WMO) issued its annual climate report following a record-hot 2015, highlighting records already announced by different countries’ weather agencies. The agency pointed out that not only was 2015 breaking records on the surface but also hundreds of meters deep in the ocean. And the first two months of 2016 were even hotter, so startling that they “have sent shockwaves around
1.35°C The temperature in February, which was warmer than average
the climate science community,” David Carlson of the World Climate Research Program said in
a statement.Climate scientists blame record-high temperatures last year and this year so far on a combination of a supersized El Niño, which is a natural warming of parts of the Pacific that changes weather worldwide, on top of a longterm global warming trend from the burning of fossil fuels. T he Nat ion a l A eron aut ic s and Space Administration said last month was 1.35°C (2.43°F) warmer than average. Of that, 0.8°C (1.44°F) comes from the long-term warming and 0.25°C (0.45°F) from El Niño, with the rest unexplained residual, calculated climate scientist Stefan R ahmstorf of the Potsdam Institute in Germany and the University of New South Wales. Even after the El Niño phenomenon abates in coming months, way above normal temperatures won’t exactly go away, Carlson and others said. “We’re on a slope; sometimes
the slope goes very steep, sometimes it’s a little bit more shallow, but we’re going upward,” Carlson said in a news conference. “So the normal is going to be increases: It’s going to be increased temperature, increased ocean heat content, loss of ice, we know all of these things.” Katharine Hayhoe, a Texas Tech climate scientist who wasn’t part of the WMO team, agreed: “These records vividly illustrate the destructive power of an El Niño on climate change steroids.” The WMO predicts warmer weather accompanied by pockets of both drier and wetter conditions, depending on the region, around the world. WMO Secretary-General Petteri Taalas told reporters in Geneva that many people believe the climate issue is “solved...since we reached a nice agreement in Paris.” But, he said, “we haven’t changed our behavior yet.” AP
Quake fear stalks Kathmandu after strong 2015 temblor
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ATHMANDU, Nepal—Early evening, there is a play of light and shadow over Kathmandu’s famous Durbar Square. The rising monuments, damaged by the April 2015 earthquake, appear as dark silhouettes while large flash lights streak through in between them. Young men and women sit on the monuments damaged by the earthquake. Some even hang on to temporary scaffoldings in place to strengthen the buildings, some of which are over 500 years old. Santhos Sharma, a 30-year-old man who sells trinkets to visiting tourists at the square, smiles at them and shrugs his shoulders. “What else can they do, they can’t live in fear all the time.” But Sharma like many others who survived, fears the next big one. Despite the devastation of the 2015 April earthquake—it left over 9,000 dead, over 27,000 injured and a recovery bill of over $3 billion—many here know that the 7.5-magnitude quake could have been worse. A yellow fading notice pasted on the narrow stairwell of the Nepali Red Cross headquarters about two years before the earthquake warned that Kathmandu Valley is most vulnerable. Around 40,000 people may die, 95,000 persons may be seriously injured and 60 percent of houses will be totally destroyed according to a study. “Nobody here knows what to do, or how
WOMEN sell flowers at dusk in front of archaeological monuments damaged by the April 2015 earthquake in Durbar Square Kathmandu. AMANTHA PERERA/IPS
to react if there is another quake,” said Sharda Bista, a Kathmandu resident. “People also have very few options to be safe.” Bista pointed to a row of narrow dimly lit rooms, diagonally supported by columns of wooden poles. “Those buildings can collapse at the slightest jolt, but where can they move.” All of them are also living on top of constant danger. A recent international study found that the subsurface Himalayas were constantly shifting and one of the most volatile regions
in the world. The study published in Nature Geoscience in January also warned that there was dangerous potential for another major quake in the region. The below surface rupture during the 2015 April quake stopped 11 kilometers below the surface, but constantly building pressure beneath the Indian subcontinent could force the rupture to snap again. “Work on other earthquakes has suggested that when a rupture stops like this, it can be
years or decades before it resumes, rather than the centuries that might usually be expected,” lead author Dr. John Elliott of Oxford University said. “Unfortunately, there is no way of predicting precisely when another earthquake will take place. It’s simply a case of countries and cities making sure they are well prepared for when it does happen.” Ordinary people like Sharma and Bista worry that with very real little preparation or awareness, the jam-packed Kathmandu Valley—population of 2.5 million, or close to 10 percent of the national population and one of the fasted growing metropolises in South Asia according to the World Bank, is a death trap. Over 13,000 persons are packed into a square kilometer here. There are constant reminders of danger. On the afternoon of February 24, there was yet another jolt recorded at 4.7-magnitude on the Richter scale. There have been many such jolts since the April earthquake. Soon after such minor tremors, social media is replete with jokes on how Kathmandu is now used to them. “But we are not,” Sharma says. He told Inter Press Service that he does not when or how he would get warnings on post-earthquake situations. The best format is the mobile, but as the last earthquake showed the networks can get clogged. Amantha Perera/IPS
Green Monday BusinessMirror
Monday, March 28, 2016 A13
www.businessmirror.com.ph • Editor: Lyn Resurreccion
WORLD WATER DAY
Water scarcity is a clear and present danger
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B F H R | Inter Press Service
OME—Water scarcity is already a clear and present danger, and it is the innocent, particularly women and children, who are harmed most. When we are inundated with information about water, it’s easy to become desensitized. World Water Day on March 22 gave us an opportunity to reflect on the one simple truth: Water is life. Eight y-f ive percent of t he world’s population lives in the driest half of the planet; almost as many do not have access to adequate sanitation. Every year 6 million to 8 million of our fellow humans die due to water-related diseases and disasters. One in seven people on the planet lack access to safe drinking water. Increasingly intense and frequent El Niños and La Niñas are intensifying droughts and flooding on opposite corners of the earth. W here water is scarce, and where poverty is clear, women and children bare the primary responsibility for water collection to accomplish the most basic of family needs. On average, in Africa and Asia, they walk 3.7 miles a day just to collect water. In some parts of the world, water collection takes six hours a day— globally, women spend 125 million hours a day collecting. If they do not, their probability of survival begins to fade—water is the foundation of all of their needs. Globally, freshwater resources are diminishing, but our demands for water continue to rise, putting added pressures on governments to find ways to continue to provide for their people. Through a wider lens, these facts show the impact of freshwater scarcity on larger groups of people. Seventy percent of freshwater consumption is currently attributed to
6M-8M
People die who every year due to water-related diseases and disasters.
agricultural demands; in fastergrowing economies, it accounts for almost 90 percent. Freshwater resources, often shared between national borders, are diminishing, and their value has a political impact of Machiavellian intrigue. As recently as 2015, in the arid landscape of the Middle East, Syria, Yemen and Iraq, to cite a few, the military have targeted water-supply facilities in order to advance their agendas. In the northern city of Aleppo, Syria, where fighting has crippled the main pumping station for months at a time, the United Nations Children’s Fund has recorded 18 deliberate water cuts this year alone. Taps in some communities were left dry for up to 17 days in a row—and for over a month in some areas of the city. At the same timeframe, we have seen conf lict over water between the Ukraine and Russia, Iran and Afghanistan, and witnessed fatal disputes in Columbia, Somalia and Mexico. Between refugee camps on borders and peoples isolated by military
A WATER vendor and residents of an area take drinking water from a roadside water source in Kolkata, India, on March 22. A report says India has the world’s highest number of people without access to clean water. The international charity Water Aid says 75.8 million Indians, or 5 percent of the country’s 1.25 billion population, are forced to either buy water at high rates or use supplies that are contaminated with sewage or chemicals. AP/BIKAS DAS
c a mp a i g n s , w ome n a nd children continue to look for and collect water. It is more and more difficult for them to do so in alarmingly unsecure environments. Jordan, one of the driest countries in the world, is running out of water. With 600,000 Sy r ian refugees camped in the northern part of the country, pressure on its already overstretched resources is immense. And as these conflicts continue to spread, the innocent will always continue to suffer. Their coming lives will be dictated by the erosion of our environment, population growth, rapid urbanization, and the decisions made by those in ivory towers. For them, it is time for all of us to act.
Smarter stoves to combat household air pollution
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HEN it comes to cooking indoors over open fires, the harmful health effects can be equal to smoking two packs of cigarettes a day. This indoor air pollution plagues nearly nine out of every 10 Bangladeshi households, which use wood and other biofuels to cook inside. Over time, exposure to smoke from indoor cooking leads to deadly diseases—such as lung cancer, stroke and heart disease. This is why it’s the most deadly environmental problem in the world. In Bangladesh such indoor air pollution is responsible for 10 percent to 15 percent of all deaths. It may seem obvious to say that we need to focus on cutting household air pollution. But such policies compete with many other potentially beneficial proposals for how to use scarce resources from the national budget or international stakeholders. So what are the very best policies? This is what the Bangladesh Priorities—a cooperation with BRAC and dozens of the world’s top economists—promises to help answer. Our research suggests two principal ways to help decrease deadly air pollution inside the home: People could either burn the same biofuels that most Bangladeshi households currently use, but with smarter cook stoves that emit much less pollution, or they could change to liquefied petroleum gas (LPG), which burns much more cleanly. The cheapest way to quality indoor air is to get widespread investment in
an improved biomass cook stove. This is simply an enclosed stove, often with a chimney, that reduces heat loss, protects against the wind, and transfers heat to a cooking pot more efficiently than traditional stoves or open fires. It burns the fuel—often biomass— more effectively and hence, with less pollution. In Bangladesh the cost of such a stove with two burners and a chimney that will last three years is about Tk. 1,000 per year. This is both to cover the aggregate that needs replacement every third year, as well as some maintenance. And almost a third of the cost goes to promoting awareness of the opportunity in the first place. But the benefits are many. If all 30 million households switched to improved cook stoves, it would save more than 33,000 lives each year. Each life will live on average another 28 years, which is worth about Tk. 79 billion or Tk. 2,600 per household each year. Moreover, each family will get slightly fewer sick days, worth another Tk. 260. But the families would also save 15 minutes per day in cooking time, because the improved cook stoves are faster, and because less fuel is needed, it will reduce fuel collection time by half each day. In total, that benefit is worth another Tk. 2,000. For each Tk. 1,000 spent on a better cook stove, a family will get almost Tk. 5,000 in health and time savings benefits: every taka spent will do Tk. 5 of good. This is an important step to improve
household air quality. But it still leaves most of the problem in place—we will “only” save 33,000 of 150,000 deaths each year. That is why we could consider a more thorough option. LPG burns very clean—almost like an electric stove. Adoption of these stoves would produce much higher benefits: it would save 91,000 lives, a total value of Tk. 218 billion, or Tk. 7,300 per household. It would also avoid some Tk. 700 of disease per household, speed up cooking by 40 minutes, and save all fuel collection time, at a net worth of Tk. 5,200. But, the cost of LPG is also significantly higher. It would cost about Tk. 10,000 each year, plus Tk. 2,000 in cooking fuel costs. In total, you would pay about Tk. 12,000 for about Tk.13,200 in benefits. So spending on LPG stoves would not be a loss. This shows that the most expensive option is not necessarily the best option. Cheaper options, despite helping less, can be a much better way to help everyone. In the long term, however, the more expensive options can be solutions. Many countries at similar income levels as Bangladesh have adopted modern cooking fuels such as LPG at substantially higher rates.
The Daily Star (Bangladesh)/IPS
A14 Monday, March 28, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Promises, promises
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E are deep into the campaign season and with the election less than 45 days away, the candidates are continuing to use their most formidable weapon: “The Promise.” While mud-slinging of opponents and inflating their own past accomplishments are always necessary, offering the people “something more” is where the action lies.
No one really wants to believe, as Italian sculptor and painter Michelangelo said, “The promises of this world are, for the most part, vain phantoms.” A candidate for mayor of Paris, France, in the 1930s promised to move the city to the countryside so that residents could enjoy fresher air. In 1970 a candidate in the US city of Aspen, Colorado, vowed to “rip up the city streets with jackhammers to force all transportation to be by foot or bicycle.” We read in the platform of one presidential hopeful that “our plan also involves providing in-city or near-city high-rise housing for informal settlers.” Which “informal settler” or hardworking rank-and-file employee, for that matter, would not vote for the person who promises a high-rise housing unit presumably paid for or subsidized by the government? Another candidate says the government, under a new administration, should “in education, organize all the classrooms, to ‘digital.’” While the specifics are lacking—as with all good political promises— visions of free laptops and tablets dance in the dreams of the voters and their children. Mackenzie King, Canadian political leader and prime minister for 20 years from the 1920s through the 1940s, wrote, “The politician’s promises of yesterday are the taxes of today.” A friend of the BusinessMirror, Emmanuel “Doy” Santos is an economic-policy analyst based in Ad-
elaide, South Australia, with degrees from Carnegie Mellon University and a Master in Development Economics from the University of the Philippines. Santos makes the argument that candidates should be asked to provide the cost and, preferably, where the money will come from to pay for the promises. He writes that those aspiring to elected office should provide not promises, but “fully costed platforms to see if all proposals fit with revenue/ deficit limits.” In other words, and more bluntly, candidates should tell us how they intend to put our money where their mouth is. There are approximately 4 million informal settlers in Metro Manila. How many will get new high-rise housing, and how much will it cost? There are approximately 6 million high-school students and 16 million primary students in the Philippines. Taking our students digital might cost between P50 billion and P200 billion. How does the presidential candidate intend to pay for that cost—increased taxes, shifting of funds in the current budget, or by borrowing the money? Further, candidates can often act like a suitor trying to win his or her true love by raising the stakes of what they are offering. Santos: “I’m having a hard time just keeping track of what promises they’re making.” But this is what political campaigns are all about, and for the electorate, in the words of a recent rock song, “Promises, promises, I’m enjoying the illusion.”
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03282016
PCSO celebrates Women’s Month Atty. Jose Ferdinand M. Rojas II
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HE Philippine Charity Sweepstakes Office (PCSO) joined the Philippine Commission on Women (PCW) in observing March as National Women’s Month by implementing initiatives that give women special access to PCSO services.
The PCSO set up a special lane for women clients the whole of March at the agency’s Lung Center of the Philippines satellite office, where requests for individual medical assistance are processed. PCSO frontliners in the head office and branch offices nationwide greeted women clients “Happy Women’s Month.” A tarpaulin in front of the PCSO head office in Mandaluyong City also bears the same announcement. A PCW advocacy video is played over waitingarea monitors at the head office and PCSO-LCP satellite office, and during the nightly PCSO Lotto draw show on television. These actions are meant to increase awareness among the public of women’s issues, and the role of the government in caring for all members of society on a foundation of equality
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and nondiscrimination. It might not be known to the general public, but government agencies are required to create and implement gender-development plans for their employees. While this usually takes the form of inclusive sports and team-building events, the purpose of the plan is to educate and inform employees about human rights, in general, and women’s rights, in particular, that are sometimes overlooked or even violated, often without bad intention, because of mindsets stemming from prevailing cultural norms. The government is attempting to address this concern through the implementation of Republic Act (RA) 9710, the Magna Carta for Women (MCW). Informational materials on the PCW web site explain that the MCW is a “comprehensive
women’s rights law that seeks to eliminate discrimination through the recognition, protection, fulfillment and promotion of the rights of Filipino women,” particularly the marginalized. The law provides a “framework of rights for women based directly on international law.” The Philippines is one of the countries that pledged their commitment to the Convention on the Elimination of All Forms of Discrimination Against Women (Cedaw) in the Cedaw Committee’s 36th session in 2006 and the United Nations Human Rights Council in its first Universal Periodic Review in 2009. Asean also has long-term plans regarding these same issues. The MCW also requires all government offices, including Government-owned and -controlled corporations and local government units,
Are we organizationally ready for PPPs? By Alberto Agra
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RISING SUN
PCSO recognizes the rights of women and all Filipinos in general, not only during National Women’s Month but everyday, and will evaluate its various charity programs and other agency intitiatives and adapt them, if need be, to better implement the MCW as appropriate.
Continued from A1 According to Cameron and Quinn, there are four “competing” values in an organization. A n orga n i z at ion m ay be fo cused just on itself or focused on the market and stakeholders. An organization may give premium to stability and control, or emphasizes f lexibility and discretion. An organization that wants to have internal focus and remain bounded by rules and tradition is said to value the “hierarchy.” A culture that values itself yet encourages participation, and “we-ness” is said to be a “clan.” An agency, which desires to engage the market within the limits of the rules, is a “market” organization. A n institution, which propels itself through in-
novation, pioneering initiatives and out-of-the-box strategies by partnering with others, is said to espouse the “adhocracy” culture. The organization, in this case, becomes a “network and market organization,” per Olsen. For PPPs, adhocracy is an imperative. In order to be PPP-ready, agencies must go outside themselves, acknowledge the deficits, embrace partnerships and be driven by a shared vision. They must be flexible, not be contented with the status quo and not stymied by rules, tradition and run-of-themill strategies. PPP requires agencies to partner with the private sector and civil-society organizations, and work w it h reg u l ators. A genc ies shou ld look beyond t he typical PPP modalities, and explore other ways of partnership
For PPPs, adhocracy is an imperative. In order to be PPP-ready, agencies must go outside themselves, acknowledge the deficits, embrace partnerships and be driven by a shared vision. They must be flexible, not be contented with the status quo and not stymied by rules, tradition and run-of-themill strategies.
for the public good. This does not mean that agencies should violate the law and dismiss itself, and treat its plantilla as irrelevant. On the contrary, adhocracy should coexist, and must complement the other values of “clan,” “hierarchy” and “market.” As part of the bureaucracy, agencies must follow the rule of law. The organization, as a team, must be capacitated and nurtured. The agency must know its mandate and capitalize on its
to adopt gender mainstreaming, a public-policy concept where the different implications for women and men of any planned government-policy action, legislation and program must be assessed, evaluated and taken into consideration. This type of approach assures that the government upholds and respects the rights of all citizens without bias and discrimination. In addition to the MCW, there are other laws that protect the rights of women, among the most significant being RA 9262, the Anti-Violence Against Women and Their Children Act, or the VAWC law. It protects women and children from violence and threats to their personal safety and security. The PCSO recognizes the rights of women and all Filipinos, in general, not only during National Women’s Month but every day, and will evaluate its various charity programs and other agency intitiatives and adapt them, if need be, to better implement the MCW as appropriate. On another note—to all my readers, Happy Easter! He is Risen! May God’s love and mercy be our comfort, as we continue our labors the rest of the year. n n n Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.
competitive advantages. The Metropolitan Waterworks and Sewerage System, by using the lowest tariff scheme for the Bulacan Bulk Water Supply Project; the Quezon province, in entering into a joint venture for bulk water, hydropower and wind power in a single project; the City of Cebu and Municipality of Cordova, in banding together for the third bridge; the province of Bataan, in engaging the private sector for its capital redevelopment; the water districts of Lingayen and Tarlac, among others, for the rehabilitation of the water system, all exemplify adhocracy. To achieve and sustain this, the leaders, partners, followers and stakeholders must all be visionary, participative, goal-oriented, capable and able, and learned. They must be transformative, since the objective of PPPs is better quality of life and must practice technical leadership, since PPPs must be legally acceptable, technically compliant and fiscally viable. We need more. We can do more. But more is required of us.
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opinion@businessmirror.com.ph
Emerging trends of external reporting Dr. Conchita L. Manabat
DEBIT CREDIT
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RGANIZATIONS are using integrated reporting (IR) to communicate a clear, concise, integrated story that explains how all of their resources are creating value. IR is helping businesses to think holistically about their strategy and plans, make informed decisions and manage key risks to build investor and stakeholder confidence, and improve future performance. It is shaped by a diverse coalition, including business leaders and investors, to drive a global evolution in corporate reporting. From the International Integrated Reporting Council web site: All entities doing business have the responsibility to comply with external reporting requisites by the regulators and expectations from parties of interest. External reporting basically includes the financial position and performance and their impact on the financial resources provided by their stakeholders. In the last century, the usual external reports could have been five to 10 pages. The dynamics of the economic landscape have driven the expectations of stakeholders and the public, in general, to expand reports beyond the traditional type. More and more, the basic financial report has been supplemented by nonfinancial information to better inform the readers of the financial reports. Thus, external reports of more than 10 times the pages of the traditional reports are no longer unusual. Among the significant developments in the recent past that have led to the shifts in reporting are n the Global Reporting Initiative (GRI); n the United Nations (UN) Global Compact; n the World Business Council for Sustainable Development (WBCSD); n the UN-supported Principles for Responsible Investment (PRI); and n the UN Global Sustainable Stock Exchange Initiative (SSE) on Environmental Social and Governance (ESG) disclosures. In response to the foregoing trends, the International Integrated Reporting Council (IIRC) was created. The International Federation of Accountants’ (IFAC) Small and Medium Practices Committee is developing implementation guideposts on integrated reporting for small- and medium-sized entities. From the standards setters, the International Auditing & Assurance Standards Board (IAASB) created the Integrated Reporting Working Group (IRWG) to respond effectively to developments in external reporting for public interest. In July 2015 the IRWG published Exploring Assurance on Integrated Reporting and Other Emerging Developments in External Reporting to inform stakeholders about ongoing work
in this area. n The paper essentially covered the following: n The evolving nature of emerging external reporting (EER) (that indicates an expectation for wider information and it is reflected in the various EER frameworks being developed); n The developing call for action to support credibility and trust (this is not limited to assurance ser vices but includes enhancing credibility and trust through effective governance and control); and n The flexibility in “external assurance” as reporting frameworks evolve. The discussion paper is a work in progress, awaiting the inputs from the IA ASB and IA ASB CAG. Related existing standards and practices will be reckoned with. There will be the usual exposure of the paper with comment period estimated at, say, 100 days. (The foregoing was excerpted from the resource materials of the meeting of the Consultative Advisory Group for the International Auditing & Assurance Board held in Paris, France, on March 8 and 9). As in any standard setting exercise, there are a lot of issues to be considered, and continuing dialogues with parties of interest are imperatives. With the shifting economic landscape and emerging expectations, the journey toward meeting expectations on emerging external reporting will not be an easy ride. Rather, challenges abound and collective efforts among all concerned parties are necessary. May those involved and to be involved do not lose sight of the very reason behind all the changes in external reporting—to better inform the readers/users of reports and for public interest.
Ambassador Antonio L. Cabangon Chua’s legacy
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MBASSADOR Antonio L. Cabangon Chua has now returned to his creator, but the legacy he left behind will keep his memory alive. He died on March 11, 2016.
The late Ambassador’s business enterprises include banking, insurance, real estate, hotels, preneed plan, health care, memorial parks and car dealership, but it was in his media ventures that he was so passionate. Headline Manila, a daily tabloid, was his first, in the ’70s, followed by Philippines Graphic, a weekly newsmagazine. I served both publications as founding publisher. In the ’80s, he organized DWIZ, a 50,000-watt AM radio station; then paired it with Home Radio, an FM broadcast network, which I helped set up in various regions. Today, aside from DWIZ and Philippines Graphic, his media enterprises include CNN Philippines, an international TV channel; the BusinessMirror, the nation’s top business daily newspaper; Pilipino Mirror, a daily tabloid; and several other publications dealing with lifestyles, travel and cooking, and a world-class printing establishment—Brown Madona. They are all under the competent hands of his well-trained children. For many years he was chairman and president of the Catholic Mass Media Awards Foundation. Amba, as he was fondly known, enthusiastically embraced media as vital tool for development, promotion of Christian values and culture, and social justice. To him, free media are vanguards of democracy. For decades, he
supported the activities of media organizations. During my stint as president/officer of Manila Overseas Press Club, Publishers Association of the Philippines Inc., National Press Club (NPC) and Federation of Provincial Press Clubs of the Philippines Inc., I always counted on Tony’s support. Pareng Tony’s passion for media must have been deepened by his friendship with noted media personalities, among them: Blas Ople, Adrian Cristobal, Amado Hernandez, Celso Carunungan, Nick Joaquin, Clem Roxas, Greg Brilliantes, Pete Lacaba, Mon Tulfo, Recah Trinidad, Gimo de Vega, Rolando Carbonell, Emil Jurado, Tony Lopez, Cesar Mella, Willy Baun, Rey Langit, Butch del Castillo, Nering Andolong, Bubby Dacer, Cecil Arillo, Fred de la Rosa, Caloy Castro, Teddy Boy Locsin, Amado Gat Inciong, Pat Gonzales and Joe Tumbokon, to name some. In 1965 Pareng Tony was introduced to me by a mutual friend, Alex Liu of the Examiner magazine at the National Press Club. It was at the NPC where he developed close ties with media players. I was Pareng Tony’s corporate communications senior vice president and PR man for more than three decades. Farewell, my good friend and boss. May you enjoy eternal bliss.
Too friendly to fly?
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B A M | Bloomberg View
RAVELERS love Virgin America, the hip, mood-lit airline backed by Richard Branson. And why not? The self-described “low-fare, upscale” carrier promises passengers that they don’t need to accept the dismal nickel-and-dime, fee-for-everything flying experience offered by the competition. Instead, fly Virgin and you can have it all—legroom and the cheap ticket. Unfortunately, telling customers they can have it all rarely ends well. And Wednesday’s news that Virgin America is seeking buyers suggests that its business model— beloved as it is—will turn out to be little more than a happy historical blip. When Branson founded the airline in 2007, he had an optimistic vision. Rather than focus on routes where he could outcompete older carriers, he wanted to offer a bet-
ter product. “The American airline system, 10 years ago, didn’t have a decent airline,” he told Bloomberg Television last week. “So I thought, let’s launch Virgin America.” He targeted hip young fliers in cities like San Francisco and Austin, Texas, and tricked out his planes to resemble after-hours clubs, complete with stylish cocktails (explicitly marketed as pickup tools) and trendy boarding playlists. Virgin would offer more legroom,
Dr. Conchita L. Manabat is the president of the Development Center for Finance. A former chairman of the Board of Accountancy, she is a member of the Consultative Advisory Group of the International Ethics Standards Board for Accountants. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@ gmail.com.
Why investors face roller-coaster markets
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B M A. E-E | Bloomberg View
ISK assets, such as stocks, corporate bonds and bank loans, have been trading in a wide and volatile range, taking investors on a roller-coaster ride up and down, including most recently a rally of about 10 percent in US equity markets.
This phenomenon is likely to continue in the short term, so here are eight characteristics of this financial environment: Pronounced fluctuations within the trading range reflect primarily the tug of war between a weakening global economy and continuing liquidity injections from central banks and
corporate balance sheets. The fluctuations are accentuated by patchy market liquidity: On the way up, prices overshoot levels warranted by the exceptional funding that markets obtain. That backing includes the monetary-stimulus programs of central banks (notably the Bank of Japan, the European
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Central Bank and the People’s Bank of China), as well as the deployment of corporate cash for share repurchases, higher dividend payouts and mergers and acquisitions. On the way down, prices fall below what would otherwise prevail on the basis of fundamentals. This behavior is likely to continue in the short term, shifting the opportunities for higher monthly/quarterly returns away from conventional strategic long-term portfolio positioning and toward more short-term trading and volatility trades. Because today’s markets are heavily influenced by the direct and indirect
involvement of central banks, correlations among asset classes are less reliable, weakening the effectiveness of risk mitigation through traditional portfolio diversification. Although it remains necessary, such diversification is no longer sufficient to ensure effective risk management. Accordingly, fluctuating cash levels not only provide agility for tactical positioning but also act as a risk mitigator. Over time, the trading range is more likely to get wider than smaller. As this occurs, the probability of either a policy mistake or a market accident will increase. And even absent these two disruptive developments, the
comfortable leather seats and inflight Wi-Fi. There was just one problem: money. During its first five years, Virgin America had exactly one profitable quarter, while recording a cumulative net loss of $671.3 million. Some of that loss was due to normal start-up and expansion costs. And Virgin’s launch nearly coincided with the onset of a historic recession. Still, by 2011, most major US airlines were back to enjoying record profits. Virgin, by contrast, suffered a net loss of $100 million. It wasn’t as if Virgin was losing out to competitors with better amenities. Rather, by 2011, the industry had figured out that it could achieve sustained profitability by packing more seats into the same cabin, and charging fees for everything from checked bags to extra legroom. Most notably, low-cost, no-frills Spirit Airlines was making a record profit ($95 million in 2011) while earning a reputation as the country’s most-hated carrier (basically, the yin to Virgin’s beloved, low-profit yang). The secret to Spirit’s success wasn’t hard to discern: US fliers will choose low prices over amenities. But Virgin wasn’t just getting out-competed on price. The airline’s target demographic—affluent millennials in cool cities—was necessarily limited. In 2013 it slowed down its delivery schedule for new jets, and last September it conceded that it was having trouble com-
ing up with enough flights for its new gates in Dallas. With a smaller network, there’s more pressure to compete on each route. Or not: In February, when fares between Dallas and New York’s LaGuardia fell to as little as $41, Virgin said it would rather fly empty than lose money fighting for market share on the route. In all likelihood, then, it’ll lose market share. Fortunately for Richard Branson, Virgin has been making money since 2013. But that profitability rests on shaky ground, including a debt restructuring that lowered its interest costs ahead of a 2014 initial public offering, and a concerted effort to slow expansion. Another key factor is one that has helped airlines worldwide: plummeting fuel costs. Sooner or later, Virgin will have to expand, and fuel prices will rise again. Can it survive both changes, much less profit? That question will have to be answered by whoever acquires the airline. JetBlue and Delta seem like the most likely suitors at the moment—and that doesn’t bode well for Virgin’s model. Delta has lately earned record profits by adding seats to planes and fees to everything. The once-beloved JetBlue has been following suit since 2014. The likelihood that either will tolerate a quirky business model for long is slim. Virgin America, Richard Branson’s vision for decency in the sky, will soon be just another airline.
range itself will become increasingly fragile as its gets wider. It is too early to determine with certainty whether the eventual dismantling of the trading range will result in an upward or downward breakout. Much will depend on the policy responses in the systemically important economies in Asia, Europe and North America. A constructive policy response would require a transition from the excessive reliance on central banks to a set of policies that reinvigorates growth engines, deals with aggregate demand imbalances, addresses excessive pockets of indebtedness
and makes progress in completing regional and global economic/financial architectures (which also would counter the rise of political extremes on both sides of the Atlantic). If this approach were successful, rangebound trading would yield to genuinely higher financial asset prices that are firmly supported by strengthening fundamentals. But the more this policy handoff is delayed, and the greater the political polarization, the higher the probability of notably lower markets that, in turn, would risk contaminating economic fundamentals and making the politics even messier.