BusinessMirror April 27, 2016

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PESO EXCHANGE RATES n US 46.7770 n JAPAN 0.4207 n UK 67.7518 n HK 6.0316 n CHINA 7.2025 n SINGAPORE 34.6112 n AUSTRALIA 36.0838 n EU 52.7130 n SAUDI ARABIA 12.4725 Source: BSP (26 April 2016 )

A broader look at today’s businessBusinessMirrorBusinessMirror

www.businessmirror.com.ph n Wednesday, April 27, 2016 Vol. 11 No. 200 P. | | 7 DAYS A WEEK

MEDIA PARTNER OF THE YEAR2015 ENVIRONMENTAL

LEADERSHIP AWARD

UNITED NATIONSMEDIA AWARD 2008

BM GRAPHICS: ED DAVAD

BIR tweaks rules on use of prescription waivers

ILP AVERTS POWEROUTAGE IN MERALCOFRANCHISE AREAS

HENARES PLUGS LOOPHOLES IN REVENUE REGULATION CAUSING LITIGATION DEFEATS

INSIDE

BMReportsAVIDA TO

DEVELOP NEW‘CITY CENTER OF QUEZON CITY’

PLUGGING A BIG HOLE

ANOTHER RIOWITHDRAWAL

BusinessMirror

E1 | Wednesday, April 27, 2016 Editor: Tet Andolong

According to Jay Teodoro,Jr., manager, strategic landbank man-agement group of ALI, the success of the project is an indication that Quezon City is a good market. “It validates ALI’s integrated planning is acceptable to consumers because of its location, good master planning and the brand itself,” he said.

As far as location is concerned, Teodoro said the Vertis project, lo-cated in the prime heart of the city founded by President Manuel Luis Quezon, is strategically located on Edsa and West Avenue.

Moreover, Teodoro said buying a residential condominium in Vertis North delivers a very good premium, as only 35 percent of the area will be for residential development. “It makes Vertis products more valu-able,” Teodoro pointed out.

Vertis North is the 46-hectare

property, inclusive of TriNoma, be-ing geared by the property giant to become the new central business and lifestyle district of Quezon City.

He also pointed out that the Ay-ala brand also is a major factor in at-tracting buyers to the Vertis project. Being a topnotch developer, ALI has developed an excellent reputation and track record in master planning communities, and that experience has brought it to a unique position in the market.

Avida Towers SolaAVIDA Towers Sola is also creating a buzz among buyers who want to experience the ALI way of living in Quezon City.

“Avida Towers Sola is gaining a lot of interest from di�erent markets as a mida�ordable, high-rise residence in Vertis North, and a last opportu-

nity to gain an Avida residence in the district,” Raquel Cruz, Avida Land Corporate Planning Group head, said in a recent media brie�ng held in Makati City. Although it is adja-cent to Vita, Cruz said Avida Tow-ers Sola will have units facing Vertis North Gardens. �e open space in the project will have a 2-hectare park made of wide lawns and greenery, and features sloped, terraced gar-dens for public events.

�e gardens will be similar to world-class central parks and o�er breathing space in the midst of the district. In�ltration stripes lining the district’s streets and two detention ponds have been integrated into the gardens’ design to prevent �ooding. With basement parking underneath the commercial development, Vertis North will be a pedestrian-friendly and highly walkable district.

Cruz said Avida Towers Sola is accessible to Edsa, and enables resi-dents to travel with the convenience and accessibility of this main thor-oughfare. Other main transit points nearby are Quezon Avenue, Agham Road and North Avenue.

�e �rst tower will have 1,004 residences in a mix of studio, one-bedroom and right-sized two-bed-room and three-bedroom units. �e right-sized units were designed to provide family members more of their own spaces. �e two-bedroom units also come with a multipassen-ger toilet and bath,-allowing simul-taneous use of the facilities.

Prices for Avida Towers Sola units start at P2.6 million.

With Vertis North’s growing per-

ceptibly, Cruz said residents of Avida Towers Sola will experience life in an area dubbed the new “city center of Quezon City.”

Meanwhile, Teodoro said Avida is pursuing construction of the cleared areas of the estate, with land development now above 90-percent completion. Furthermore, he said utili-ties, road networks and an innovative Stormwater Management System that runs throughout the district will be completed by December.

To accommodate a huge number of shoppers, Cruz said Vertis North Mall will feature four retail clusters. To make malling a more relaxing ac-tivity, he added that Avida will have an open-air interconnection with lush landscaping and water feature designed to traverse the entire mall.

For entertainment, the mall boasts of several cinemas, including a 400-seater cinema with a balcony �tted with recliner seats.

Avida will have a three-tower of-�ce development called Vertis North Corporate Center, for its business-process outsourcing clients. By the end of the year, the mall and �rst of-�ce tower will be operational.

To �ll up the demand for quality hotels, Avida will build the largest hotel in Quezon City, Seda Vertis North. Once �nished, it will have 438 guest rooms and will be com-pleted in time with the district’s gardens and underground parking in 2017.

Avida Towers Sola will turn over units of its �rst tower by 2020. To-tal development of the whole Vertis project is P65 billion.

AVIDA TO DEVELOP NEW ‘CITY CENTER OF QUEZON CITY’

B R R S. R @brownindio

AFTER the warm response of the market for Avida Towers Vita in Vertis North,

Ayala Land Inc. (ALI) subsidiary Avida Land recently launched Avida Towers Sola. It is ALI’s latest residential project in the district that has 31 residential stories.

8NEWTOWN Boulevard, Mega-world’s �rst residential develop-ment at the 30-hectare The Mac-

tan Newtown in Lapu-Lapu City, won the coveted “Best Condo Development in Cebu” at the 2016 Philippines Prop-erty Awards held recently at Fairmont Hotel in Makati City. The four-tower residential cluster also received two “Highly Commended” awards, namely,

“Best Residential Interior Design” and “Best Landscape Architectural Design.” Boasting of unparalleled views of Ce-bu’s Hilutungan Channel and Magellan Bay, 8 Newtown Boulevard highlights one of Cebu’s most spacious condo-minium lobbies and �rst-class amenity deck with an outdoor in�nity pool, and �tness center, as well as Japanese-in-spired gardens and courtyards.

MEGAWORLD’S 8 NEWTOWN BOULEVARD WINS AT 2016 PHILIPPINES PROPERTY AWARDS

RECEIVING the award is Noli D. Hernandez (right), president of Megaworld Cebu Properties Inc.

PLUGGINGA BIG HOLE

SportsBusinessMirror

A BIG HOLESports

B S AUSA Today

BEFORE Golden State Warriors star Stephen Curry took the floor at the Toyota Center on Sunday, a song played inside the Houston Rockets’ arena that said everything about the modern-day magnitude of the

reigning Most Valuable Player’s (MVP) reach. It would still be hours until Curry’s second-quarter slip would leave the Warriors wondering if their Title defense was slipping away, and “I’m the Plug,” by rappers Drake and Future, was booming in the building. Even in enemy territory, in this Rockets house where Curry would eventually leave the court limping with eyes full of tears, they saw it fit to play a tune that includes a shout-out to Steph Curry and his history-making wrists. A Warriors official on hand chuckled at the counterintuitive nature of the moment. In any setting, it seemed, there was just no stopping the Curry mania that had enveloped the National Basketball Association (NBA) all season long. And then, when Curry’s legs twisted like a Gumby doll and his right knee hit the floor so hard on that fluke play just before halftime, that’s exactly what happened. The question now: How in the name of all things Curry will Golden State plug this kind of gaping hole in their lineup? The Warriors learned on Monday that they will

be without Curry for at least two weeks because of a Grade 1 MCL sprain, but the true impact of his absence might have all the reach of a Billboard top 10 hit. From San Antonio to Oklahoma City, Cleveland, Los Angeles and beyond, the reality that Curry won’t be part of the Warriors’ championship equation for the foreseeable future means everyone else’s odds just went up. This was fast-becoming Curry’s NBA, the Warriors winning in ways we had never seen and the rest of the league being left behind. The Kawhi Leonard-led Spurs had been phenomenal in winning a franchise-record 67 games, but losing twice to the Warriors late in the regular season seemed to take the sexiness out of that subplot. LeBron James, who so many predicated during the summer would lead his Cavaliers to a first-ever title in Cleveland, seemed at times to be farther away from that goal this season than he was during the Finals loss last June. The list went on from there: the Thunder’s Kevin Durant and Russell Westbrook, the Clippers’ Chris Paul & Co. All of these stars who are aware how a title can impact a legacy, it seemed, would be hard-pressed to pass this deep and dominant Golden State bunch.

Even if the best-case scenario unfolds for the Warriors, with Curry returning late in a second-round series against either the Clippers or the Portland Trail Blazers, there’s a very real possibility that when he returns, he won’t look anything like the

hoops magician

we’ve come to know. And the Warriors,

with their 73-win season campaign already fading into the rearview mirror, will have to unleash quite the effort to even set the stage for a

comeback. It can be done, though. That’s

the luxury of having a roster like this one, with the game’s second-best shooter, guard Klay Thompson, always ready for a

scoring spike. And players like Andre Iguodala, Shaun Livingston and Harrison

Barnes who can do more but often don’t because

their roles—in the context of Curry—don’t call for it.

Draymond Green will be the ultimate X-factor, not only because

of his fiery ways but because his versatile skillset—the playmaking,

the scoring, the defending—will be needed more than ever.

It starts with the possible closeout game against the Houston Rockets on

Wednesday at Oracle Arena, where the Warriors (who are up 3-1) will still be seen as the favorites if only because the Rockets’

effort was so shameful in Game Four. To steal a phrase from the Spurs’ legendary

coach, Gregg Popovich, they’ll have to pound the rock from there. Considering

all the grief the Warriors took for having good health leading to their title in 2015, when teams like the Memphis Grizzlies and the Cavs endured so many injuries that made the masses wonder if the Warriors would have won it without that good fortune, it would make for quite a tale.

OKLAHOMA CITY—Russell Westbrook had 36 points, 12 rebounds and nine assists as the Oklahoma City beat Dallas, 118-104, on Monday night to win the first-round playoff

series, 4-1, and advance to the Western Conference semifinals. Westbrook was 13-of-23 from the field and seven-of-eight on free throws. Kevin Durant scored 33 points and Steven Adams added 15 points and 10 rebounds for the Thunder, who will play

the San Antonio Spurs in a series that begins on Saturday. Oklahoma City shot 50.6 percent from the field and trumped the Mavericks on rebounds, 42-35. Dirk Nowitzki scored 24 points, Justin Anderson had 14 and Zaza Pachulia added 12 points, nine assists and seven rebounds for the Mavericks, who were hampered by injuries throughout the series. Oklahoma City lost Game Two, 85-84, at home, then won

SportsSportsSportsSportsSportsC1 | WEDNESDAY, APRIL 27, 2016

[email protected]@businessmirror.com.ph

Editor: Jun LomibaoAsst. Editor: Joel Orellana

THUNDER IN SEMIS three straight, including two on the road. In Charlotte Kemba Walker scored a playoff career-high 34 points and Jeremy Lin added 21 to help Charlotte beat Miami, 89-85, to even their first-round series at 2-2. Walker scored 11 straight Charlotte points in the fourth quarter after Miami had cut the lead to two with 6:07 left. Courtney Lee sank two free throws with 4.6 seconds left after being fouled on an offensive rebound to seal the win. Lee finished with 11 points and helped hold Dwyane Wade to

12 points on four-of-11 shooting. Al-Farouq Aminu scored

a career-high 30 points as Portland beat the Los Angeles Clippers, 98-84, to even their playoff series at two games apiece.

The Trail Blazers pulled away after LA’s Chris Paul

departed midway through the third quarter with a broken bone in his

right hand. It was not immediately clear how he was hurt, although

his wrist appeared to bend back when he guarded Portland’s

Gerald Henderson on a lay-up. The Clippers were further hurt when Blake Griffin retreated to the bench late in the game after appearing

to aggravate the left quad injury he struggled with this season. AP

The Warriors learned on Monday that

they will be without Stephen Curry for

at least two weeks because of a Grade

1 MCL sprain, but the true impact of his absence might

have all the reach of a Billboard top 10 hit.

From San Antonio to Oklahoma City,

Cleveland, Los Angeles and beyond, the reality

that Curry won’t be part of the Warriors’

championship equation for the

foreseeable future means everyone else’s

odds just went up.

HOW in the name of all things Stephen Curry will Golden State plug this kind of gaping hole in their lineup? AP

SportsSportsBusinessMirrorSportsC4 | WEDNESDAY, APRIL 27, [email protected]@businessmirror.com.ph

ANOTHER RIO ANOTHER RIO ANOTHER RIO ANOTHER RIO ANOTHER RIO ANOTHER RIO WITHDRAWALWITHDRAWALWITHDRAWALWITHDRAWALWITHDRAWALWITHDRAWAL

B D F�e Associated Press

CHARL SCHWARTZEL of South Africa is the latest player to drop out of the Olympics, making him the fourth major champion in the last two weeks to decide against being part of golf’s return after a 112-year absence.

Ty Votaw, the Professional Golfers’ Association (PGA) Tour’s chief spokesman and vice president of the International Golf Federation, said on Monday that Schwartzel notified officials late last week. The former Masters champion moved into a strong qualifying position when former British Open champion Louis Oosthuizen cited family and scheduling issues for withdrawing. Another former Masters champion, Adam Scott of Australia at No. 7 in the world, is the most high-profile player to say he would not compete this summer in Rio. Vijay Singh, the 53-year-old Fijian and three-time major champion, said two weeks ago he would not play in the Olympics. Gary Player said he was “sad and disappointed” by top players withdrawing, particularly the South Africans. Player, who has won nine majors and is golf ’s foremost global player, is the Olympic golf captain for South Africa. “South Africa had a great team, but now obviously, it will not be as good,” Player said in a statement. “Players withdrawing hurt the game of golf. I was sorry to hear that Louis Oosthuizen and Charl Schwartzel have withdrawn their names from consideration. They have been playing outstanding golf lately. This certainly impacts South Africa’s chances to win a gold medal. “No doubt they would have made our team even stronger.” Each country is allowed no more than two players until the field for Rio reaches its limit of 60. Countries are allowed up to four players if they are in the top 15 of the world ranking by July 11. Branden Grace, who won at Hilton Head two weeks ago, is the highest-ranked South African at No. 11. Schwartzel not playing means Jaco Van Zyl at No. 59 is the most likely candidate to replace him. George Coetzee is next in line at No. 85. Scott is the second-ranked Australian (behind Jason Day at No. 1) and his spot most likely would fall to Marc Leishman, who lost in a playoff at the British Open last year. Singh not playing means Fiji will not be represented in the men’s competition. While the cutoff to qualify through the world ranking is on July 11, all current candidates on May 6 go into a registry pool for stringent drug testing, which includes giving their whereabouts for out-of-competition testing. Golf was last part of the Olympics in 1904. The International Olympic Committee in 2009 voted golf back into the program, assuring it a spot for this year’s Games in Rio and in 2020 in Tokyo. But a vote in 2017 will determine if golf stays beyond 2020. Key to golf’s success is getting the top players, and the top 3—Day, Jordan Spieth and Rory McIlroy—have indicated they are playing. “Golf is one of the most popular sports in the world and our best players should be showcased on the biggest stage in sports,” Player said. “Luckily, we will still have four more years to make sure the best players see the importance and commit to play in Tokyo, Japan.”

B T A�e Associated Press

MADRID—Extra security measures may be needed to protect some athletes staying outside of the Olympic Village during the Rio de Janeiro Games,

one of Brazil’s top security officials said on Monday. Andrei Rodrigues, responsible for overseeing Brazil’s security in special events, said the need for specific plans was discussed after the local organizing committee said Rafael Nadal was going to stay at a friend’s house, instead of

MADRID—Rafael Nadal filed suit on Monday against a former French minister who accused him of doping, saying he needs to defend his integrity and image as an athlete.

The Spanish tennis star said his lawyers lodged the defamation suit in Paris against Roselyne Bachelot, because of her “offensive remarks” on French television last month. Bachelot, France’s former minister for health and sport, said on TV show Le Grand 8 that the Spaniard’s seven-month injury hiatus in 2012 was “probably due to a positive doping test.” “Through this case, I intend not only to defend my integrity and my image as an athlete but also the values I have defended all my career,” Nadal said in a statement. “I also wish to avoid any public figure from making insulting or false allegations against an athlete using the media, without any evidence or foundation and to go unpunished.”

He said if he wins the case, any compensation awarded by the judge will be “paid back in full to an NGO [non-governmental organization] or foundation in France.” Bachelot’s remarks upset Nadal and outraged Spaniards, including many fellow athletes who quickly came out to defend the tennis star. The Spanish Olympic Committee and members of the Spanish government also loudly criticized the former French minister. Nadal’s coach and uncle, Toni Nadal, called Bachelot “an imbecile,” according to Spanish media. A 14-time Grand Slam champion and the gold medalist at the 2008 Olympics in Beijing, Nadal is one of Spain’s biggest sports idols. The president of Spain’s Olympic committee said he would like to see Nadal as the country’s flag bearer at the Rio de Janeiro Games, in part to make a statement after the recent accusations made by Bachelot.

Alejandro Blanco said Nadal “is a reference” and deserves the honor, “after how he has been treated” by the former French minister. Nadal had been selected as Spain’s flag bearer for the 2012 London Olympics, but missed the Games because of an injury. Nadal expressed his “complete trust in the French justice system,” which will handle the lawsuit and said he will not make any further statements about the case. Bachelot’s allegations came in the wake of Maria Sharapova’s failed doping test. AP

» RAFAEL NADAL (center) jumps into a swimming pool surrounded by tournament volunteers as they celebrate Nadal’s victory at the Barcelona Open in Spain on Sunday. AP

NADAL DEFENDS VALUES

SECURITYNIGHTMARE

CHARL SCHWARTZEL is the fourth major

champion in the last two weeks to decide

against being part of golf’s return after a 112-

year absence. AP

The former Masters

champion moved into

a strong qualifying

position when former British Open

champion Louis Oosthuizen cited family

and scheduling issues for

withdrawing.

the athletes village. Nadal later denied the information given by Rodrigues, saying that he still intended to stay at the Olympic Village, as he did the other two times he participated in the Games. Rodrigues said a few golfers are among those not staying at the athletes village and may need special security plans. The Brazilian official said that although it would be impossible to provide “personal security” to all athletes in Rio, a few situations could prompt special attention from local authorities and would be analyzed on a case-by-case basis. “Any action out of the ordinary will obviously prompt greater concern,” Rodrigues told The Associated Press after a media event in Madrid. “We would need to come up with a secondary operation, so that is a concern to us, obviously. It would be more comfortable for us if all athletes stayed in the village and traveled from there to the training venues and to the competition venues.” The US men’s and women’s basketball teams will be staying on a cruise ship in Rio’s renovated port area, where increased security is already expected.

Nadal’s possible presence at a friend’s house prompted special concern because he would not be staying at a hotel, unlike most other athletes skipping the Olympic Village. Most hotels picked by athletes already have their own security measures in place and are well prepared to protect their guests. Rodrigues did not give any specific details about where, or with whom, the Spaniard would be staying during the August 5-to-21 Games. “The information we received from the committee is that he will be staying at a residence,” Rodrigues said, without elaborating. Nadal was a star attraction at the Olympic Village in 2008 in Beijing, when he won the tennis gold medal. He was constantly sought after by other athletes for autographs and photos. The 14-time Grand Slam winner also stayed at the village in 2004 in Athens. The Spaniard missed the 2012 London Games because of an injury. “The athletes are the VIP clients of the Games,” Rodrigues said. “They are the stars and they have to shine, so obviously we need to make sure that they have all the conditions to

compete, and for that to happen we need to keep them safe.” Rodrigues also did not elaborate on the golfers who are not staying at the Olympic Village. He said members of some equestrian teams also do not plan to use the official Olympic accommodation. He said organizers do not intend to interfere with the athletes’ choices of accommodation, although the local organizing committee can make recommendations based on security concerns. The Brazilian official said the critical event security-wise will be the games’ opening ceremony, when nearly 100 heads of states and about 10,000 athletes will be at the Maracana Stadium. He said security in the soccer host cities—Sao Paulo, Brasilia, Salvador, Manaus and Belo Horizonte—will follow the same model used during the World Cup two years ago, when no major incidents occurred. Rodrigues also did not elaborate on the golfers who are not staying at the Olympic Village. He said members of some equestrian teams also do not plan to use the official Olympic accommodation.

PROPERTY E1

SPORTS C1

SPORTS C4

BM GRAPHICS: ED DAVAD

BMReportsBMReportsBM

Banning political dynasties: The beginningB F V. E @elefantefil   

Conclusion

SEPTEMBER 23, 1986, was a pivotal day for the political-dynasty issue.

This was the day it was decided whether the provision for banning po-litical dynasties would be inserted in the 1987 Constitution. The minutes of the Constitutional Commission showed that the ban on political dynasties almost never saw the light of day. When it was suggested that the ban

be included in the local government sec-tion of the Charter, the members of the Constitutional Commission rejected the proposal. However, the proponents of the ban didn’t give up after that setback. Two members of the Constitutional

Commission engaged in a fierce debate on the issue. On one side was Jose N. Nolledo, who was for including the ban in the Charter; and Christian S. Monsod, who disagreed with their view.

INTERNAL Revenue Com-missioner Kim S. Jacinto-Henares has apparently grown

tired of losing tax-assessment cases—and the resulting billions of pesos in foregone revenues—that she moved to plug one big loophole in revenue regulations causing these litigation defeats: the defense of prescription waiver.

RMO 14-2016

New order issued by Internal Revenue Commissioner Kim S. Jacinto-Henares relaxing the procedures governing

defense of prescription waivers

B L L @llectura

HOW do you keep electricity consumers happy? By keeping the brownouts at bay, of course, like what happened in Manila Electric Co. (Meralco) franchise

areas on April 15.Manual Load Dropping (MLD), or rotating power out-

ages because of low power supply, was averted within the Meralco franchise areas because the utility firm had acti-vated its Interruptible Load Program (ILP).

The program involved 121 ILP participants that voluntarily deloaded 247 megawatts (MW) of capac-ity, according to Meralco.

With the implementa-tion of ILP after a red alert issued by the system grid operator, the estimated deloaded contribution of 247 MW from the ILP participants helped avert rotating brownouts, Meralco Spokesman Joe Zaldarriaga said.

“We were able to prevent power interruptions that could have affected close to 300,000 customers last April 15,” he said.

But Meralco has to compensate these ILP participants. Com-pensation will be realized via collection of additional genera-tion charge from Meralco customers.

“For the deloading last April 15, we estimate that compensa-tion to ILP participants would be about P500,000 to P600,000. This would be equivalent to an add-on to the generation charge of around P0.0002 per kilowatt-hour [kWh], if the total is collected in one month,” Meralco Head for Utility Economics Lawrence Fernandez told the BusinessMirror.

247MWEstimated contribu-tion from 121 Interruptible Load Program

participants that helped prevent rotating brownouts

C A

NONI

E REY

ES

Those who vote against are voting against political dynasties,

and those who vote for want political dynasties to be perpetuated.”—T

BusinessMirror www.businessmirror.com.ph Wednesday, April 27, 2016A2

BMReportsBanning political dynasties: The beginning C

After Nolledo made his proposal, Monsod moved to have the prohibition deleted from the proposed Constitution. The matter was put to a nominal vote. Nolledo’s proposal survived by one vote. Seventeen votes backed Monsod move to have the ban deleted, while 18 members of the Constitutional Commis-sion opted to retain the ban. One mem-ber abstained. He was Hilario Davide, who would one day be appointed Chief Justice of the Supreme Court. After the vote, Monsod questioned the way the vote was conducted, a move that Rene Sarmiento opposed. For the next several minutes, the mem-bers of the Constitutional Commission discussed which of their rules applied to their pending dilemma. The matter was finally settled after Monsod withdrew his motion. Davide then raised a new issue. Instead of using the word “broaden,” he suggested that the phrase “ensure equal access to” be used. He also sug-gested that the phrase “public office” be changed to “public service.” “So the entire section will read: ‘The state shall ensure equal access to op-portunities public service and prohibit political dynasties,’” Davide suggested. However, Davide’s suggestion gave Franciso Rodrigo an opportunity to ask for the deletion of the phrase “prohibit political dynasties.” “By prohibiting political dynasties, we do not broaden but restrict opportuni-ties for public office,” Rodrigo explained. “That phrase is even incompatible, in-consistent with the very substance of the proposed amendment.” Another round of discussions began.

More questionsSERAFIN GUINGONA then took the floor and asked if the commission had ap-proved Rodrigo’s proposed amendment. “May I respectfully request for a reply regarding my question if the proposed amendment of Commissioner Rodrigo is approved by this Commission whether we would be precluded from proposing another amendment relative to political dynasties?” Guingona asked. “My opinion is, if the proposed addi-tion is substantially the same as the por-tion that was deleted, then that cannot be considered anymore,” Rodrigo answered. “But if it is not substantially the same, then it cannot be considered.” Guingona replied that his question was directed at the presiding officer. Trenas answered: “Yes, the chairman agrees, if there is substantial change.” Nolledo asked to be recognized and he was given the floor. “I would like to respond to the state-ment of Commissioner Rodrigo that the prohibition of political dynasties is only correlative to the first part,” Nolledo said. “I was interpellated by Commissioner Ople and I agreed with him when he asked if it was the intention of the committee to

prohibit political dynasties in order to widen opportunities to public office and I answered yes.” Nolledo reiterated that he disagreed with Ople’s view. Ople had earlier sug-gested that prohibiting political dynas-ties would limit opportunities to public office. Nolledo then asked Rodrigo if he wanted to hear the explanation again. “The gentleman has said enough,” Rodrigo replied.

Whatever wayAFTER Rodrigo had his turn, Christine Tan, a nun of the Religious of Good Shepherd and another member of the Constitutional Commission, asked to be recognized. “The chairman recognizes Commis-sioner Tan,” Trenas said. When Tan took the floor, she told her fellow commissioners that the “main con-tent” of what they voted on so passion-ately was the issue of political dynasties. “We can apply the law in whatever way we wish, so that it comes out that we are not returning what we tried to delete, but in our hearts, we know that the main point was political dynas-ties,” she said. “And whatever words we use, we know that the main point is political dynasties.” “And I want to be put on record because those who vote against are vot-ing against political dynasties, and those who vote for, want political dynasties to be perpetuated,” she added. Crispino de Castro then took the floor and argued that the issue at hand was not about political dynasties. “We are talking here of Rule X, Section 50 of our rules, as well explained and expounded by Honor-able Maambong,” de Castro said. At this point, Commissioner Yusuf Abubakar took the floor. “It seems the debate centers on a proposition that is vital to our democracy,” he said.

Elect their ownABUBAKAR sided with those in favor of deleting the phrase “prohibit political dynasties” from the provision currently under debate. “How can we, on the assumption that we are only appointed or even if we were elected, suppress the voice of the people if they want an elected representative to continue with one, two [for] three terms?” he asked. “So be it. We are not here to suppress that voice.” He also reminded his fellow commis-sioners of the dictum that the voice of the people is the voice of God. “So I agree with the proposition of Commissioner Rodrigo, which is to elimi-nate that portion and let the beginning stand and eliminate ‘prohibit political dynasties,’” Abubakkar said. At this point, Trenas, who was the presiding officer, appointed Maambong as acting Floor Leader in the absence of Commissioner Napoleon Rama. Maambong then took the floor and announced that the commissioners present were now ready to vote on the motion to delete the phrase “prohibit political dynasties.”

A technicalitySARMIENTO prevented the vote from taking place by reminding everyone that the first attempt to delete the entire provision on political dynasties was re-jected by a vote of 18 for retaining the pro-vision, against 17 who voted for deletion. He added that Rodrigo’s attempt to delete the phrase “prohibit political dy-nasties,” was out of order. “My submission, Mr. Presiding Officer, is that the motion to strike out is a viola-tion of what we have approved favorably this noon and a violation of Section 50 of our rules,” Sarmiento said. De Castro, who answered Sarmiento’s assertion, bluntly told Sarmiento to read the second sentence of Section 50. “It states and I quote: ‘A motion to strike out’—and that is the mo-tion of Commissioner Monsod to de-lete—‘being lost,’ which was lost by questionable votes, ‘shall not preclude an amendment,’” de Castro explained. De Castro also pointed out that Ro-drigo’s motion was in reaction to Davide’s amendment.

A point of orderRODRIGO, who agreed with de Castro, then said: “The body should vote on whether to vote for or against my amendment.” Davide reacted to Rodrigo’s state-ment. “Mr. Presiding Officer, for the record, my amendment was not an amendment by substitution,” Davide said. “My amend-ment is to change only the following words—‘broaden’ and ‘office.’ And so, it is not to be considered technically as an amendment by substitution.” Commissioner Jose Suarez took the floor and focused on Nolledo’s motion:

“And the gentleman is saying that because of such a development, that should practi-cally bar any further motion to delete the substance of this particular provision?” Nolledo replied that Suarez was correct. “Before the motion to delete was filed by Commissioner Monsod, all the discus-sions were centered on whether or not to prohibit political dynasties,” Nolledo said. “And that is the reason the gentleman is saying that the Honorable Rodrigo, with due respect to him, is out of order in this regard,” Suarez replied. Rodrigo immediately responded to the development. “I am only asking for the deletion of a portion of the section as reworded by the proponent, Commissioner Davide,” Rodrigo said. “I think the situation should be to let the body vote on my amend-ment. Why prevent the body?” Commissioner Ambrosio Padilla, who was the vice president of the Constitution-al Commission, took the floor and tried to clear the matter up by suggesting that a vote be taken. Maambong then asked if Davide’s amendment had been accepted by the commission. Commissioner Gregorio Tingson told Maambong that Davide’s changes had already been accepted. “Since that is accepted, there is now a pending motion to amend the amendment of Commissioner Davide by Commissioner Rodrigo,” Maambong said. “But just to keep the parliamentary situation in order, we cannot proceed to that, unless we resolve the point of order raised by Commissioner Nolledo. And the point of order raised is that we cannot vote on the motion of Com-missioner Rodrigo to delete the words ‘prohibit political dynasties.’” Maambong also explained that since the body was apparently split into those who believed that Section 50 applied to the situation and those who believed otherwise, the presiding officer must rule on Nolledo’s point of order. “The chairman rules that the point of order raised by Commissioner Nol-ledo is not well taken because of Sec-tion 50,” Trenas said. Nolledo tried to appeal the ruling of the chairman, but was thwarted by Maambong, who said: “An appeal to the ruling of the chairman is not debatable.” Maambong put the matter to the floor, so that the body can vote on it. The commissioners upheld the ruling of the presiding officer with 18 votes in favor and 14 against with no abstentions. This paved the way for the commission-ers to vote either in favor or against the phrase “and prohibit political dynasties.”

Aborted attemptAFTER the bell was rung and the com-missioners called in, Jose Colayco tried to prevent the vote from taking place. “I believe we are departing from past practice,” Colayco said. He warned that if this vote was taken, it would effectively paralyze their proceedings. “We will be back to where we were,” he said. “Again, what will stop somebody with another amendment to amend the vote which, in effect, struck out the sec-tion, which we have agreed upon by a vote of 18 to 17 to remain?” Colayco added that Rodrigo’s motion to delete the phrase was inconsistent with the first vote, which approved the reten-tion of the controversial provision. Trenas immediately responded that Rodrigo’s motion was in order. Thereafter, Colayco conceded and dropped his objection.

The voteMAAMBONG reminded everyone that those who vote “yes” would be vot-ing for the deletion of the words “and prohibit political dynasties,” while those who would vote “no” were for the reten-tion of the said phrase. The matter was finally put to the floor. The results of the nominal voting were 18 votes in favor of deleting the phrase and 21 votes against deletion. “The proposed amendment of Mr. Rodrigo is lost,” Trenas said. Guingona then proposed that the words “as may be provided by law” be added. Davide objected, saying that it was inappropriate to add such words to the Declaration of Principles. Instead, Davide suggested that the phrase should be “as may be defined by law.” Guingona agreed with Davide’s pro-posal. Thus, the ban on political dynasties took its final shape and included in the present Charter. And nearly three decades after the Constitutional Commission spent so much time and energy discussing the appropriateness of the ban on political dynasties, the prohibition is still just a hollow statement in the Constitution.

BusinessMirror Wednesday, April 27, [email protected]

BMReports

Foreign consultants alone would mean bringing out our dollars

to pay their services, that’s where the critical point is: while we import purely the products that we don’t have, we have to study their technology and research into local materials.”—T

A3

PHL to rely on imports as cacaoself-sufficiency remains elusive

Cocoa Foundation of the Philip-pines President Edward David said the local cacao industry may not be able to meet the production target under the government’s road map and an initiative dubbed as the “2020 Cacao Challenge.”

David said natural calamities have been largely responsible for the expected failure of local producers to increase output to

100,000 MT by 2020.“Since we started the push for

increased production in cacao, it has not really gone up because we were hit by natural calamities,” he told the BusinessMirror in a phone interview.

“With cacao production, you also have the challenge of time constraint. What compounds our problem is that we do not have

B M G C. P @ _enren

LOCAL chocolate makers are expected to continue importing cocoa, as cacao farmers may not

be able to produce as much as 100,000 metric tons (MT) of cacao beans by 2020, an industry leader said on Tuesday.

enough nurseries, and we are not yet prepared with our seedlings,” David added.

The 2020 Cacao Challenge is an initiative of the local cacao industry and the national government to in-crease the country’s production and outward shipments of cacao beans.

Farmers have targeted to raise the number of cacao trees in the Philippines to about 50 million trees, which could yield 100,000 MT of cacao beans per year.

David said the target produc-tion volume is enough to satisfy the demand of local manufacturers and establish the Philippines as a cacao-exporting country. He added that local producers will not have problems in selling their produce, given the current deficit in global cocoa supply.

However, the Philippines will, likely, remain dependent on co-coa imports, as the current out-put could not meet local demand pegged at 30,000 MT.

100,000 MTThe volume of cacao beans that the government and local farmers are targeting to produce annually

B M T. C @awimailboxMindanao Bureau Chief

GENERAL SANTOS CITY—The Department of Energy (DOE) is embarking on a

long-term energy development blueprint that seeks to cut down on dollar-depleting foreign depen-dence on oil and gas development.

The formula would be simple: develop local contents for the cur-rently imported oil products and mass transport systems; invite more local talents; and faster de-ployment of local innovations in the energy sector.

Director Jesus T. Tamang of the DOE’s Energy Policy and Planning Bureau told the BusinessMirror at the sidelines of a recent media orientation on energy here that only an increased reliance on local talents and resources in the energy sector will the country move for-ward to progress.

But as simple as it looks, he said, the sector would need a lot of help from everyone: local science re-searchers; congressional tweaking of a law on foreign ownership; help from Filipino scientists abroad; better government attention to in-novations and inventions; and con-tinued piloting of gadgets, equip-ment and mass transport systems.

Import dependence FOR the meantime, the Philip-pines could not help but still rely on purely imported oil products for most of its energy needs, notably for electricity and transportation.

While the industry sector is the main consumer of energy produc-tion, supplying the needs, as well as improving the transport sector, plays a crucial role in the efficient and timely delivery of goods and services, the manpower to run the industry and to move people, goods and services as the main drivers of the country’s domestic production.

Tamang alluded to the specific determination of the needs of each region, or industry, as an emerging important tool to distribute the scarce, yet expensive, energy re-sources, especially with the prevail-ing energy crisis in Mindanao ex-acerbated by the El Niño dry spell.

“We have to be very specific in determining which region or sector needs this or that particular level of energy supply, with some excess to avoid a supply crisis,” he said.

“Which would bring us again

to face the reality that we are still heavily reliant on pure importation of oil products and machineries for the industry and the transport sec-tor,” Tamang said.

The DOE, however, is now on a conscious effort to undertake research into the possibility of in-creasing the local content—both in mix blending of biofuel with oil and using local materials, like iron and steel, in lieu of imported ma-chineries and transport systems.

“Here, we need to [undertake] re-search on the feed stuff available…suitable for biofuel mix with our oil, similar to the current blend-ing of gasoline with coconut oil,” Tamang said.

He added that the DOE is look-ing into adapting the Brazilian model where the South American country was able to mix as much as 80 percent of its local biofuel with imported oil.

“If we can do that, it only means that we only have to import 20 percent of the needed oil supply, and that would greatly benefit the country,” Tamang said.

Foreign tie-upFOR the meantime, Tamang said the Philippines may have no bet-ter alternative but to enter into a partnership with foreign compa-nies or experts, “while we continue to grapple with crafting our own technology and harnessing our local resources for local mixing.”

To develop oil and gas produc-tion, for instance, the country “still needs 100-percent foreign investment, and these foreign en-tities would have to bring in their experts, he said.

“Foreign consultants alone would mean bringing out our dol-lars to pay their services,” Tamang said. “That’s where the critical point is: while we import purely the products that we don’t have, we have to study their technology and research into local materials.”

For example, when the country would have to import buses that run on compressed natural gas to begin relying on locally generated energy source, Tamang said, “we should study [the] technology [for that] and, eventually, develop our own buses from local materials.”

“Initially, we have to import them because we don’t have them,” he added.

The Light Rail Transit-Metro Rail Transit systems in Metro Ma-nila may be case in point in terms

of foreign tie-up. Tamang said the materials and technology were all imported, and consultancy remains in the hands of foreign experts.

“But we have develop our own. Look at the railway cabs developed by the Department of Science and Technology,” he said. “While the promise is there, we are still slow in that area.”

It is in that area that the gov-ernment should be quick and at-tentive to support innovations, Tamang said, adding that “we need to look out and encourage more innovations, and to deploy them immediately.”

On the industry side, Tamang said the resurgence of manufac-turing in the last six years has also required the energy sector to import more oil and gas to cope with its growth.

A DOE energ y situat ioner posted in 2010 on its web site showed that manufacturing ex-panded by 16.2 percent over the first semester of that year, which was considered as a major con-

tributor of the industry sector’s 4.8-percent growth.

Tamang told the media orienta-tion here the growth surge experi-enced by the manufacturing sector has continued to this day.

Tweaking the lawWITH services sector’s resurgence at 3.1 percent on that same period ascribed to the 10-percent increase in domestic trade, Tamang would expect the sector to have more in-vestments to cope with multifari-ous energy needs, mainly electric-ity, amid diminishing power supply for the Luzon grid.

“Many investors have wanted higher percentage of ownership here, but because energy falls un-der the utility sector, the [60 per-cent to 40 percent] constitutional limitation on ownership [prevails],” Tamang said.

The decision to revise the own-ership issue would have to be ad-dressed by Congress, including some economic provisions that could further entice foreigners to

DOE aims for lesser foreign dependence on energy resources

invest, he added.The same tweaking of a law

would matter to local government units to encourage them to be ag-gressive in inviting local invest-ments on power and transportation.

“We have a move to encourage regional plans now to allow local governments to determine their own needs and to invite invest-ments that they need,” Tamang said. “With the facilities built in their localities, local governments would not have to spend now. Rath-er, they would benefit from the expected spending of investors on roads and bridges, as well as getting an income from these operations.”

“It just need a tweaking of the law, like pointing out that income should be determined at the point of extraction so that the tax would go direct the local government. It should not be at the point of sale, where the main taxes go to Makati City because their main offices are there,” he said.

Tamang added that the Mind-anao Development Authority (Min-DA), the national government’s socioeconomic planner for Mind-anao, “would be a very good help and inspiration to coming up with regional plans on energy, because it has helped to reduce by half the permitting, licensing and process-ing time in investing in power.

The MinDA has also created the Mindanao Power Commission to manage and approve all appli-cations for investment in power across Mindanao.

C A

“But if conform forms from partici-pants are returned over two or three months, as past experience suggests, then the recovery will be spread out correspondingly and the add-on rate will be smaller,” Fernandez added.

ILP works by calling on business cus-tomers with loads of at least 1 MW to run their own generator sets, if needed, instead of drawing power from the grid.

 With the ILP, power supply from the grid that will not be consumed by par-ticipating customers will be available for use by other customers within the franchise area. Through this, the ag-gregate demand for power from the system is reduced to a more manage-able level, helping ensure the avail-ability of supply.

 With ILP, the peak demand was ar-rested at a lower level of 9,416 MW on April 15. The high and increasing heat index triggered an unusual rise in de-mand for power, where Luzon alone reached around 9,700 MW to breach historical records, according to the Department of Energy (DOE).

 This prompted the National Grid Corp. of the Philippines (NGCP) to is-sue a red alert in Luzon from 1 to 3 p.m. The red alert was lifted at 3:01 p.m. and NGCP placed Luzon on yellow alert once more that day.

The government-owned Malaya thermal power plant in Rizal also helped avert a power outage in Luzon.

 According to the DOE, the Malaya power plant is already on stream as a must-run unit during weekdays, where power demand is higher compared to weekends. Currently, the plant’s Unit 1 provides 290 MW of capacity, while the Unit 2 is still starting up and is ex-pected to be online on Tuesday night to augment the power supply in Luzon.

  A must-run unit must provide needed power supply on real-time basis to ensure reliability of power supply in the grid, especially when there’s a shortfall.

  But  Energy Secretary Zenaida Monsada said it is more economical for the Malaya plant to be placed on stand-by and activated only when needed. This, she added, entails addi-tional cost because the plant needs fuel. 

“There is really additional cost in-volved in running the Malaya plant and placing it on standby. Since it takes eight hours to start the plant run-ning, it would be cheaper to have it on standby. It’s not wise to have it turned on and turned off. It still entails cost,” Monsada said. 

Consumers, she cautioned, should not complain if power rates do increase as a result of the mitigating measures implemented by the government and the private sector. “Tayong mga consumers, ayaw natin ng mataas ang presyo ng kuryente. Pero alin ba ang mas importante? May kuryente na may kamahalan or walang kuryente?”

ILP AVERTS POWEROUTAGE IN MERALCOFRANCHISE AREAS

PHOTO shows the solar panels mounted on the roof of the Asian Development Bank building in Ortigas Center.

Despite this, David lauded the efforts of farmers and other stakeholders to boost output. “I’m happy with the passion of cacao growers. They will continue to plant as they know there is a de-mand in the local market.”

The average farm gate of price of cacao is currently at a range of P140 to P150 per kilogram, which is higher than world-market prices, according to David. This should entice more farmers to plant ca-cao, he said.

In 2014 data from the Philippine Statistics Authority (PSA) showed that the country’s cacao production rose by 11.31 percent to 5,427.66

MT, from 4,875.82 MT in 2013.Data also showed that the num-

ber of cacao-bearing trees during the period rose by 3.09 percent to 3.70 million, from 3.59 million in the previous year.

Edwin Banquerigo, Department of Trade and Industry’s (DTI) na-tional coordinator for cacao, said government data is only a third of the industry’s estimates.

Banquerigo said industry esti-mates place cacao-planting areas in the country at 25,000 hectares to 30,000 hectares and national output at 12,000 MT to 15,000 MT a year. He also said the cacao industry cluster—which includes the private sector, growers, the DTI and the Department of Agri-culture—is planning to extend the implementation of the cacao road map until 2022.

“The 2020 Cacao Challenge will be extended to 2022 by the end of the next presidency. But we are not abandoning the targets. We are just

pushing back the timetable so it could be implemented in the next administration,” Banquerigo added.

He said the new road map will be finalized and be presented in Cebu during a meeting with the indus-try cluster on May 25. The updated road map will be presented to the next president of the Philippines.

Under the existing road map, Banquerigo said the government is assisting farmers by giving them seeds and helping them improve average yearly cacao yield to 2 ki-logram per tree from 1 kg per tree.

Banquerigo said the industry cluster will also urge the next presi-dent to create a cacao development council.

“One of the plans of the cluster is to come up with a cacao devel-opment council, which will require an executive order from the Presi-dent. From there we will work on creating a cacao board, which will then require legislation from Con-gress,” he said.

BusinessMirror [email protected] A4

B B F @butchfBM

Wednesday, April 27, 2016

BMReports

This developed as a United States official privately conveyed to Sen. Vicente C. Sotto III the US concern over serious threats posed by “cyber terrorists” in the wake of the multimillion-dollar heist car-ried out by still-unnamed hackers who raided the Bank of Bangladesh account at the Federal Reserve in New York in February, and laun-dered a big part ($81 million) of the loot in Manila casinos. The discreet warning, Sotto said, was aired at a recent conference he at-tended in the US.

Senate eyes separate probe as hacking widens with attacks on SWIFT softwareSENATE Committee on Banks

Chairman Sen. Sergio R. Osmeña III plans to call a separate

inquiry—after the elections—into the continuing implications of the $81-million Bangladesh central bank cyber heist, following reports that hackers may have compromised, as well, the “SWIFT” software that runs the global financial system.

Osmeña, replying to a query from the BusinessMirror, dis-closed that he got word the Bangko Sentral ng Pilipinas (BSP) is already aware of the warning issued by the Brussels-based Society for World-

STANDING on a nuclear-pow-ered US aircraft carrier the length of more than three

football fields as it plows through one of the world’s most contested seas, Rear Adm. Marcus Hitchcock has only high praise for the navy of his biggest military rival: China.

Around 125 nautical miles from the Malaysian coast in the South China Sea, Hitchcock, the newly minted commander of the carrier strike group, led by the USS John C. Stennis, says his ships have been en-gaged on almost a “24/7 basis” with a “completely professional” People’s Liberation Army (PLA) Navy.

“We have had nothing but pro-fessional interactions,” he said on Monday on the flag deck of the John C. Stennis, over the near-constant roar of fighter jets taking off and landing. “The ocean is a very con-nected environment, and the sail-ors that are on it, the navies that are on it, are very connected, no matter what their nations are go-ing through diplomatically.”

Those diplomatic issues are, however, increasingly bleeding into the military sphere, amid ac-cusations by the US and China that the other is militarizing the South

China Sea, a key shipping lane that’s the subject of overlapping territo-rial claims by China and Southeast Asian nations, like Vietnam. The deployment of the carrier comes against the backdrop of tensions over China’s land reclamation that has enabled it to build airstrips and base missiles in the area.

Flanked by three destroyers, and with a guided missile cruiser also in the strike group, the John C. Stennis doesn’t need to venture into waters claimed by China to send a message. China currently has just one aircraft carrier, the Liaoning, commissioned in 2012 and built in a hull purchased from the Ukraine. It is building a second one domestically.

The two countries’ navies have been abiding by a code they set up for unplanned encounters at sea, Hitchcock said. The code is “going very well.”

Coast guardBUT it doesn’t extend to groups including the coast guard, and with China increasingly using its coast guard in the South China Sea as a de facto navy, security analysts have warned of the in-

creased risk of a clash. In March an Indonesian patrol ship was caught in a scuff le with Chinese coast guard vessels over a fishing boat that was snared inside In-donesian waters, and the country has now pledged to deploy F-16 fighter jets to the area.

Hitchcock is among the senior navy officers urging coast guards to develop a similar code. “It’s an absolutely reasonable way to make

sure we are No. 1 understanding each other and communicating our intent,” he said. “Once people understand each other and commu-nicate their intent, I think you find reasonable people make reasonable decisions to go about their business in a responsible fashion.”

The presence of the John C. Stennis and a recent visit to the region by Defense Secretary Ash-ton Carter—including a trip to

the carrier —coincided with a ramping up of activity by China. Central Military Commission Vice Chairman Fan Changlong, second only in military rank to Presi-dent Xi Jinping, made a visit this month to the Fiery Cross Reef. A PLA plane also landed on a reef this month in what the official Xinhua news agency described as a medical rescue mission.

On Monday China’s defense ministry said in a statement it was concerned by news that six US Air Force planes f lew in in-ternational airspace in the vicin-ity of the Scarborough Shoal on April 19. “The Chinese military will take all necessary measures to safeguard national sovereignty and security,” the ministry said.

Hitchcock said the increased US military presence in Southeast Asia did not risk making things worse. Last year the US began to challenge China by sailing warships near its reclaimed reefs in so-called freedom of navigation operations.

“This is a routine, scheduled de-ployment,” Hitchcock said. “We’ve committed to unimpeded com-merce in this region.”

The resumption of freedom of navigation operations in the area is not a challenge to sovereignty, he added. “They are challenges to excessive territorial claims. We take no position on sovereignty other than to say we hope there is a peaceful and diplomatic resolution to sovereignty challenges here in this region.” Bloomberg News

Chinese Navy in South China Sea draws US admiral’s praise

A cooperative of 3,000 institutions serving over 10,000 banks worldwide

SWIFT

HITCHCOCK

The ocean is a very connected environment, and the sailors

that are on it, the navies that are on it, are very connected, no matter what their nations are going through diplomatically.”—H

wide Interbank Financial Telecom-munication (SWIFT).

SWIFT, a cooperative of 3,000 institutions serving over 10,000 banks worldwide, received a warn-ing from British technology and defense-security system company BAE, whose researchers appar-ently discovered “malware that the Bangladesh Bank attackers used to manipulate SWIFT client soft-ware known as Alliance Access,” according to an exclusive report by Reuters.

Osmeña said he was aware of the alert raised by SWIFT, as detailed in the report posted on the Reuters web site on Monday afternoon.

The BSP is aware of it, too, the senator replied, when asked if he received information from the central bank about this, or if he planned to find out what further measures the regulators will take to deter cyber crime in light of the new development.

The exclusive report on the Re-uters web site said: “The attack-ers who stole $81 million from the Bangladesh central bank prob-ably hacked into software from the SWIFT financial platform that is at the heart of the global financial sys-tem, said security researchers at Brit-ish defense contractor BAE Systems.”

SWIFT confirmed to Reuters it

was aware of malware targeting its clients’ software, and would “release on Monday a software update to thwart the malware, along with a special warning for financial insti-tutions to scrutinize their security procedures.”

New menace: Cyber terrorism SOTTO, a senior member of the Blue Ribbon Committee, revealed a warning by a US Federal official last month that international terrorist groups that used to rely heavily on drug money are now dipping into another source of funding: cyber terrorism, hence, the frequency of attacks on financial institutions.

Sotto, the Senate deputy minor-ity leader, declined to name the American official he met during a US-hosted conference he attended on March 21.

“They are worried,” Sotto told the BusinessMirror, adding that the US official admitted to him that “even the Pentagon was concerned” that cyber terrorists have shown capability to even raid supposedly highly secured bank coffers.

Sotto disclosed he met with the unnamed official when he attended an international narcotic conference last month. “This US expert said that the world should be more wor-

ried about cyber terrorism. That is what will bring down America and the rest of the world to its knees,” Sotto added.

He recalled the frantic warn-ing came up in the course of their discussion about the money trail of illegal-drug profits. After Sotto noted reports that terrorist cells are known to be funded by drug money from the so-called Golden Crescent that includes Pakistan and Afghani-stan, the official replied:

“Yes, but we are now more wor-ried about cyber terrorism, because it is a backyard operation.”

Sotto made the disclosure, even as Senate probers are moving to tie up loose ends in its ongoing inquiry into the $81-million money-laundering case involving funds stolen from the Bank of Bangladesh account in New York in February.

More trouble after Bangladesh heistTHE latest alert from the BAE and SWIFT provides yet another chilling implication of the hacking in early February of the Bank of Bangladesh, resulting in fraudu-lent electronic advice sent to the Federal Reserve Bank of New York, where the Bangladeshi account was lodged. Over $20 million of the money was stopped from

being released, as a result of an alert bank employee, but the $81 million pulled through, and was diverted to bogus accounts in the Philippine commercial bank Rizal Commercial Banking Corp., then changed into pesos by PhilRem, before being laundered through casinos in Manila.

The Senate Blue Ribbon panel, of which Osmeña is vice chairman, has, thus far, conducted five hearings on the $81-million money laundering.

According to the exclusive Re-uters report, the new develop-ments about malware targeting SWIFT, “in the unprecedented cy-ber heist, suggest that an essential lynchpin of the global financial system could be more vulnerable than previously understood to hacking attacks, due to the vulner-abilities that enabled attackers to modify SWIFT’s client software.”

A SWIFT spokesman told Reuters on Sunday that it was issuing the software update “to assist custom-ers in enhancing their security and to spot inconsistencies in their local database records.”

Reuters said the BAE had plans “to go public on Monday with a blog post about its findings concerning the malware, which the thieves used to cover their tracks and delay dis-covery of the heist.”

BIR tweaks rules on use of prescription waivers

Henares, in the new Revenue Mem-orandum Order (RMO) 14-2016, has relaxed the procedures on how the waiver of the defense of prescription may be deemed to have been validly executed by a taxpayer. For her, lesser complications in the execution of these waivers would make it difficult for taxpayers to use technicalities in challenging the tax-deficiency assessments made by Bureau of Internal Revenue (BIR) ex-aminers at the Court of Tax Appeals (CTA) and Supreme Court (SC). Henares justified the new policy of leaning toward the validity of the waiver of the defense of prescription to a “ram-pant” practice by taxpayers to contest the validity of their own waivers.

“However, it has been a rampant practice by the taxpayers to contest the validity of their own waivers of the stat-ute of limitations after having availed [themselves] of the benefits thereof.

Thus, there is a clear necessity to revise the procedures provided for the proper execution of such waivers,” Henares’s new order said. Naturally, tax practitio-ners are opposing yet another alleged attempt by Henares to skew the pre-vailing tax regulations in favor of the government and against the taxpayers.

Previous proceduresIN the past, when there is an ongoing tax-assessment audit by the BIR on a taxpayer and the final assessment no-tice (FAN) is not forthcoming before the three-year prescriptive period for the BIR to assess deficiency in taxes, the BIR examiner would ask the tax-payer to execute a waiver of defense of prescription to extend the time within which the BIR can assess deficiencies. But like all waivers, the rules re-garding the validity of such waivers of the defense of prescription have been strictly construed by the Supreme Court

(SC) and the Court of Tax Appeals (CTA) against the BIR and in favor of the tax-payer who issued the waiver.

The strict construction of the rules, which renders the waivers to be valid, is justified by the SC, which notes that it is the BIR, itself, which formulated these rules through RMO 20-90 and Revenue Delegation Authority Order (RDAO) 05-01. Thus, it is almost al-ways the case that when the taxpayer invokes the defense of prescription of the BIR assessment, the BIR loses the litigation at the CTA and in the SC, be-cause some formalities prescribed by the BIR’s own rules were not followed, resulting in the invalidity of the waiver.

Invalid waivers accountfor majority of lost casesACCORDING to a source in the BIR’s legal department, the majority of tax-assessment cases are being lost at the CTA and the SC due to prescription.

Although there is no study within the BIR to determine how much the government is losing in foregone revenues due to losses in tax-assess-ment cases on account of an invalid waiver, the foregone revenues are estimated to be in the billions.

“We never got to quantify it yet, but it accounts for the majority of losses in assessment cases,” the source told the BusinessMirror, when asked how much in foregone revenues are lost due to invalid waivers.

A regular check on the web site of the CTA alone will reveal that the BIR will always lose a case when the taxpayer invokes prescription because the waiver did not comply with certain formalities, which prevents the prescriptive period from being validly extended.

Relaxed rules to render waivers validUNDER the new rules on the execu-

tion of the waivers of the defense of prescription, Henares tries to close several loopholes that tax-payers may have used in the past to allow the prescriptive period to assess to lapse even after they had already executed a waiver to extend the prescriptive period. For instance, Henares’s new order asserts that since “the waiver is a vol-untary act of the taxpayer, the waiver shall take legal effect and be binding on the taxpayer upon its execution.”

If the taxpayer is a corporation, such taxpayer cannot impugn the authority of its representative in executing the waiver, if such representative partici-pated in the conduct of the audit. The waiver to extend the prescriptive period to assess may also not specify the particular taxes to be assessed, it being enough to merely say that the extension of the period to assess shall be with re-spect to “all internal revenue taxes.”

The waiver also does not have to be notarized, and it is no longer necessary for the waiver to be in the form prescribed in RDAO 05-01 for such waiver to be deemed valid and binding on the taxpayer. The other rules still apply, such that the waiver should be executed and accepted by the BIR before the original prescriptive period has lapsed. The new rules shall also ap-ply to waivers to extend the five-year prescriptive period for the BIR to col-lect on a tax-deficiency assessment.

New rules expected to be challenged at SCTHE Tax Management Association of the Philippines (TMAP) said the new rules regarding the execution of the waiver of the defense of prescrip-tion is a very important issue, which “should be addressed even at the SC level.” David Cagahastian

[email protected] Editor: Max V. de Leon • Wednesday, April 27, 2016 A5

AseanWednesday

LAO PDR President Bounnhang Vorachit (left) talks to Vietnamese Communist Party’s General Secretary Nguyen Phu Trong in Hanoi, Vietnam, on Monday. Vorachit, who was elected president of the single party state last week, is on a three-day visit to Vietnam to boost ties between the two communist neighbors. AP

95

Singapore bets on rising Asia middle class to help spur slowing economyTHE rise of the Asian middle

class will remain the dominant regional growth story for years

to come, enough to help Singapore cope with headwinds from the global economy, a top official said.

Even though the city-state’s economy is coming under strain, ob-servers shouldn’t discount positive signs, including resilient consumer spending in Southeast Asia and solid increases in air traffic at the Changi international airport, a regional hub, Economic Development Board (EDB) Chairman Beh Swan Gin said in an

interview on Monday.Beh says Singaporean businesses

can take advantage of economies set to benefit from young and growing populations and urbanization, such as the Philippines and Indonesia. While some countries in the Asso-ciation of Southeast Asian Nations are facing political uncertainty, that

Asean, despite all the political

uncertainties, is com-ing along at a pace of economic growth of around 5 percent.”

—B

At the mar-gin, this has

to be negative for the ringgit. Obvi-ously, contingent liability on the government, as well as rating risk, is there.”

—M B L.

The number of po-litical prisoners held by the Vietnamese government at the end of 2015

coming along at a pace of economic growth of around 5 percent.”

Singapore’s EDB was formed in 1961 to help attract foreign investors, with a focus on boost-ing the country’s manufacturing industry.

Growth in the export-orient-ed economy was flat in the first quarter, while the central bank provided support to the sector by announcing it won’t seek currency appreciation.

Beh said the policy easing by the Monetary Authority of Singa-pore (MAS) was probably aimed at improving the competitiveness of businesses.

“I think MAS was worried about the cost structure,” he said. “We

are a small country, international trade is a big part of the economy, so if our cost structure is no lon-ger competitive, the currency is a big reason.”

Efforts by the government to tighten the application process for foreign workers have become more targeted and aren’t aimed at any particular nationality, Beh said. The measures will be imple-mented in a way that’s mindful to investment, he said.

“If you are a company that is servicing Singaporean customers, it makes no sense having an all-foreign staff,” he said. “We want to continue to be open, there’s no question about that.”

Bloomberg News

THE newly elected president of the Lao PDR (Laos), Bounnhang Vorachit, is visiting Vietnam

to boost ties between the communist neighbors.

Vorachit told his Vietnamese host, General Secretary Nguyen Phu Trong, that it was a great honor to visit Vietnam on his first overseas trip to meet Vietnam’s leaders who are “extremely close and trustworthy friends” of Laos.

Trong, who was elected to a sec-ond five-year term in January, said Vorachit’s visit will boost bilateral relations between two of the world’s last remaining communist countries.

The 78-year-old Bounnhang Vo-rachit was elected president of the single-party state last week after he was appointed leader of the country’s Communist Party at its five-year Con-gress in January.

Laos, a poor, landlocked country with a population of just 7 million, will have a higher-than-usual profile this year because it is its turn to hold the annual chairmanship of the Asean, as the organization grapples with territo-rial disputes with China in the South China Sea.

Vorachit will meet Vietnamese President Tran Dai Quang and Prime Minister Nguyen Xuan Phuc during his three-day visit.

The United States, meanwhile, pressed Vietnam on Monday over a re-cent spate of detentions of government critics and pushed for other progress on human rights ahead of a visit next month by President Barack Obama.

Senior officials of the two govern-

won’t necessarily detract from the growth outlook as long as they keep their econo-mies open and follow market-friendly policies, he said.

“We are generally optimistic about the medium to long term,” Beh said. “Asean, despite all the political uncertainties, is

THE ringgit headed for its lon-gest stretch of losses since November and stocks were

set for the lowest close in a month as troubled state investment com-pany 1Malaysia Development Bhd. (1MDB) confirmed it’s in default after missing an interest payment on bonds.

The company is withholding a $50-million payment on $1.75 bil-lion worth of dollar notes, amid a dispute with  International Petro-leum Investment Co. (IPIC),  Abu Dhabi’s sovereign wealth fund that is the co-guarantor of the bonds maturing in 2022, according to an e-mailed statement. The deadline was on Monday. The cost to insure Malaysia’s government debt rose to the highest level in seven weeks.

“At the margin, this has to be negative for the ringgit,” said Nizam Idris, the Singapore-based head of strategy for fixed income and cur-rencies at Macquarie Bank Ltd. “Obviously, contingent liability on the government, as well as rating risk, is there.”

The currency declined for a fourth day, its longest run of losses since November 2,  according to prices from local banks compiled by Bloomberg. It fell 0.7 percent to 3.9355 per dollar as of 10:36 a.m. in Kuala Lumpur, the biggest slide in a month and taking its drop in April to 0.7 percent.

“Whilst 1MDB has the funds to have made the interest payment, it is 1MDB’s position, as a matter of prin-ciple, that it was IPIC’s obligation to do so,” the company said. “Until IPIC accepts that all obligations have been met, 1MDB is obliged to with-hold payments and will seek legal recourse and resolution.”

1MDB bondsFIVE-YEAR credit-default swaps climbed four basis points to 167 basis points, prices from Nomura Holdings Inc. show. That leaves the measure set for its highest close since March 8, according to data provider CMA.

The price of 1MDB’s 4.4 percent dollar bonds due in 2023 dropped 5 cents on the dollar to 85 cents, Bloomberg-compiled data show. The yield surged 94 basis points to 7.10 percent. Ten-year govern-ment ringgit notes also fell, push-ing the yield up one basis point to 3.83 percent, according to Bursa Malaysia prices. The FTSE Bursa Malaysia KLCI Index of shares re-treated 0.5 percent.

The missed 1MDB payment trig-gered cross defaults on 7.4 billion ringgit ($1.9 billion) of the com-pany’s debt, the statement said. The firm has been in dispute over its debt obligations to IPIC under an agreement reached in May last year. As part of the pact, the wealth fund said then it would assume ob-ligations to pay interest due under $3.5 billion of 1MDB bonds that it guaranteed. IPIC said this month that Malaysia’s state fund was in default after failing to pay it more than $1 billion in connection with a loan. Bloomberg News

Ringgit fallsa fourth day as 1MDB sends stocks lower

Newly elected Laos president visits Vietnam to boost bilateral relations

ments held an annual dialogue on hu-man rights in Washington. It’s an is-sue that remains a drag on improving relations between the former enemies.

Tom Malinowski, US assistant sec-retary for democracy, human rights and labor, said last year saw a sharp decline in arrests and prosecutions for peaceful dissent in Vietnam.

But he told The Associated Press there has been an increase in deten-tions of activists and bloggers this year, which was raised during Monday’s “open and candid” discussions. He said the US side “expressed our hope that this would be addressed and that some of the longstanding cases of concern would be resolved.”

Vietnam’s delegation was led by Vu Anh Quang, director general of the Department of International Organi-zations at the Foreign Ministry. The Vietnamese Embassy in Washington did not immediately respond to a re-quest for comment.

Obama will visit Vietnam in May, becoming the third consecutive US president to do so, four decades after the end of the Vietnam War.

The US and Vietnam have deep-ened ties in recent years as Washing-ton looks to widen its circle of friends in Southeast Asia and finds common cause with Hanoi in countering a ris-ing China. Vietnam is also a member of the US-backed regional trade pact, the Trans-Pacific Partnership, that was signed in February.

Vietnam recently adopted some laws to improve legal protections for citizens and has agreed to allow in-dependent labor unions, currently forbidden, under a labor agreement that takes effect once TPP is ratified by both nations.

But the ruling Communist Party still brooks no dissent.

According to a recent State Depart-ment report, Vietnam held about 95 political prisoners at the end of 2015. Human Rights Watch says that dur-ing the last week of March, Vietnam convicted seven bloggers and rights activists and sentenced them to prison.

Among the individual cases of de-tainees raised by the US on Monday was Nguyen Van Dai, a prominent human-rights lawyer who was arrested in December on charges of spreading anti-state propaganda. In 2007 Dai was sentenced to four years on a simi-lar charge.

Malinowski said the US was also closely watching Vietnam’s progress on legal reforms.

Laws on demonstrations, non- governmental groups and religion that Vietnam’s National Assembly is due to take up this year could have an im-portant impact on respect for human rights, he said. AP

The WorldBusinessMirror [email protected], April 27, 2016A8

Egypt attempts to avert watercrisis driven by demand, waste

But now a small, relatively cheap plow has changed all that, allowing him to nearly double the yields of his 2 acres of wheat, arranging it in neat, raised beds with smaller furrows that re-quire a third less water. “It saves us much labor, seeds and effort,” Sheikh said, calling it a “blessing” for his family, eight of whom help work the plot.

The plow could one day help Egypt alleviate water shortages that threaten to cripple the Arab world’s most populous country in the next decade. Several groups are offering technologies and tech-niques to conserve the precious resource—only a quarter of which is absorbed by crops—but time is running out.

Egypt has relied on the Nile, Af-rica’s largest river, since the time of the pharaohs. For thousands of years, annual floods dumped rich silt on the banks, allowing the country to serve as a Mediter-ranean grain reserve.

But the annual flood ended with the completion of the Aswan High Dam in 1970, and surging popu-lation growth has transformed

Eg y pt—with over 90 mil l ion citizens—into the world’s largest wheat importer.

Water is already considered “scarce” in Egypt, and it expects its per capita annual supply to fall below the 500-cubic-meter threshold that denotes “absolute scarcity” under international norms by 2025, from some 600 cubic meters today. Salinization caused by rising sea levels could also one day reduce supply.

President Abdel-Fattah el-Sissi said in a speech earlier this year that water was being provided too cheaply. Since then, household water costs have doubled or even tripled, according to bills Egyptian

have been posting on social media.Meanwhile, Ethiopia is building

a dam and hydroelectric plant up-stream that Egypt is worried will cut its share of the Nile. The two nations are discussing ways to fill the planned water reserve slowly so as to diminish the impact, but so far Ethiopia is pressing ahead with construction without a de-tailed agreement.

“It’s like watching a slow-mov-ing train wreck. Everyone knows that population growth is accel-erating, and then you have that dam, which could be a problem if it’s filled up too fast,” said Rich-ard Tutwiler, a water expert at the American University in Cairo.

“There are some intelligent, highly skilled people in the min-istries and the water sector, but there’s room for better coordina-tion, and taking more of a com-munity approach when it comes to improving crop irrigation.”

Successive governments have recognized the need for action, but policies have not kept up with surg-ing demand. Pumping stations and distribution networks are notori-ously inefficient, and water cuts in the summer months are common in Cairo. Droughts hit some ru-ral areas in the summer, and new neighborhoods built in the desert often lure residents with promises of infrastructure—including wa-ter—that never appear.

One such area is New Gurna, built on the west bank of the city of Luxor, famed for its pharaonic temples and tombs. Residents there complain they go days without water, with pressure

sometimes returning for only a few hours a week.

“If I knew it was going to be this bad, I wouldn’t have moved out here,” said high school teach-er Abdullah Said, who has been leading a campaign representing 15,000 residents urging the gov-ernment to fix their problem.

The land has been used to re-settle villagers kicked out of homes that had been built over archaeo-logical sites generations ago, which the state demolished for fear they could damage the sites. Residents say the local reservoir leaks and showed The Associated Press vid-eos of water gushing through a ra-vine near the site. Local officials deny there is a problem.

Other groups are trying to ad-dress the shortages, as well, with a wide variety of donors—from the European Union to Bill Gates—in-volved in the effort. The govern-ment has a number of initiatives to recycle water and improve ef-ficiency, but none have been able to keep up with demand.

The small plow that has trans-formed Sheikh’s land in the Nile Delta could have a major impact in a country where the vast majority of farming is done on small plots. It is manufactured locally and sells for just $5,000.

“My own father opposed switch-ing from our old ways, but when he saw the savings he was convinced,” said Atef Swelam, the scientist who developed the plow on behalf of the International Center for Agricultural Research in the Dry Areas. “Raised beds are difficult to make manually and are expensive,

but with this machine it’s simple.” Only 35 plows have been built so far, but Swelam hopes that num-ber will increase through public and private investment.

The UN Food and Agriculture Organization (FAO), which is help-ing develop the plow system, hopes the government will encourage the creation of small- and medium-sized businesses to build more.

“Then it would be self-propel-ling,” said Pasquale Steduto, the FAO representative in Egypt. Ac-tion is needed in order to conserve and manage water resources, otherwise “competition between users could create internal con-flict...or conflict with other na-tions,” he said.

Sprinkler systems and under-ground irrigation—which mini-mize evaporation—are also being pitched, but their high cost has made the government reluctant to include them in the national water plan.

Mazen Mostafa, an irrigation engineer, thinks the focus should be on transforming Egypt’s aging canals into sprinkling networks, which could expand the green ar-eas along the Nile.

“That system is thousands of years old and hasn’t been changed since the time of the pharaohs,” he said. “Our idea is to bring in inves-tors to modernize the canal system on the old lands into a sprinkler system, then expand that to create new arable land for them to farm.”

“Now it’s not just a matter of investment opportunities, it is a must, given the coming shortages,” he said. AP

CARACAS, Venezuela—As if daily life in Venezuela wasn’t hard enough, people across the crisis-wracked South

American country will now have to add electricity to the long list of things they’ll have to do without.

President Nicolas Maduro’s government on Monday began rationing power in 18 of 24 states. The rolling blackouts of up to four hours a day are a last-minute attempt to save energy until water levels stabilize at the Guri Dam, which provides the bulk of the country’s electricity.

Even in Caracas, which is being spared the rolling power cuts, outages have become a frequent fact of life as energy supplies have dwindled. Over the weekend residents in a poor neighborhood of El Calvario, on the city’s outskirts, blocked a major throughway with motorcycles and trash to protest what they said had been 29 hours without service.

“With all the shortages we face, and prices through the roof, now we have to go without electricity,” said Karelis Aristiguieta, a janitor at a local university.

“Everything is ruined,” she said, recounting how all the scarce perishable items in her fridge had spoiled, including hard-to-find milk for her two-year-old granddaughter. Maduro’s socialist administration blames the crisis on a drought caused by the El Niño weather phenomenon and acts of sabotage by its opponents.

But experts say more investment in power plants could’ve prevented the tragedy. They also point to generous state subsidies that keep utility prices low—residential electricity bills are typically less than $1 a month—for encouraging almost never-questioned habits like keeping TV sets on all night.

The daily power cuts are just the latest in a long list of energy-saving measures announced in recent weeks. Maduro has also given public workers Fridays off, declared new national holidays, and said he will shift the country’s time zone to help to ease the crisis. He’s also suggested that women stop blow drying their hair and that everyone leave off ironing their clothes. The country has seen a bit of rain in recent days, but not enough to signal the end of the dry season.

“We’re performing miracles to maintain the quality of life, but I ask for miracles that you compatriots perform at home,” Maduro said in a televised address last week. AP

MADRID—Spain’s king was to end two days of talks with political party leaders on Tuesday in a last-ditch bid

to snap a four-month deadlock in finding a candidate capable of forming a government, but another election looks more likely.

King Felipe VI was to meet with leaders of the top four parties in the December election, ending with acting Prime Minister Mariano Rajoy of first-placed Popular Party. The king will later inform parliament whether there is a candidate or if elections should be held.

Neither Rajoy nor Pedro Sanchez, leader of the second-place Socialist party, was able to garner enough support in the 350-seat lower chamber to form a government following the December 20 balloting.

Following that election, a government must be in place by May 2 or fresh elections will be held June 26.

The king hinted that he thought new elections were inevitable on Monday when he told leaders of smaller parties leaders that he would like campaigning to be restrained in any new election

In a first postelection meeting, Rajoy told the king that despite having most seats—123—he was not in a position to present his candidacy as he had no outside support. The king then called on Sanchez to try. The Socialist leader struck a deal with centrist newcomer Ciudadanos, which has 40 seats, but was unable to convince the new far-left Podemos party, which controls 69 seats.

Polls suggest new elections are unlikely to break the stalemate with no party likely to garner a majority. Thus, fresh elections could mean more months of political paralysis as parties again attempt to reach a deal. Spain has never had a coalition government.

Rajoy insisted his party should head a government and wanted Sanchez to support an unprecedented coalition of the country’s first and second parties. The Socialists, however, reject any pact with Rajoy. AP

Amid protests, Venezuela starts rationing electricity

Spain’s king, parties hold final talks to avoid elections

IN this April 11 photo, an Egyptian farmer stands in front of wheat crops on his land in Kafr Hamouda village in Zagazig, 100 kilometers northeast of Cairo, Egypt. Farmers begin to use a small, relatively cheap plow, allowing them to nearly double the yields of their wheat. The new technology could one day help Egypt alleviate water shortages that threaten to cripple the Arab world’s most populous country. AP

KAFR HAMOUDA, Egypt—“For a thousand years,” Abdullah Sheikh’s family has been

working the land the same way—flooding fields in Egypt’s Nile Delta and planting seeds by hand.

600 m3The current per capita annual supply of water in Egypt, expected to fall below the 500-cubic-meter threshold that denotes “absolute scarcity”

The [email protected] Wednesday, April 27, 2016 A9

briefsChina set to pass law tighteningcontrols on foreign nonprofits

The proposed law requires that such groups accept police supervi-sion and state the sources of their funding and how their budgets are spent, the official Xinhua News Agency reported on Tuesday.

Police would also be permitted to interview administrators and force Chinese partner-organizations to terminate any program considered a threat to state security, Xinhua said. Groups seeking to “subvert the state and split the nation” would be banned, it said.

The proposed legislation has drawn criticism from US and Eu-ropean officials and business and academic organizations concerned it would severely restrict the op-erations of a wide range of groups, further limiting the growth of civil society in China and hindering non-governmental exchanges between China and the rest of the world.

Several hundred NGOs founded, run or financed by foreigners are now operating in China in fields ranging from animal protection to

human-rights law. Many overseas NGOs have partnered with Chinese academic and social, groups but op-erate in a legal gray area that leaves them vulnerable to crackdowns by the security forces.

In one recent example, China in January released and immediately deported a Swedish man it accused of training and funding unlicensed lawyers in the country.

The third and final draft of the foreign NGO law is expected to be voted on by the National People’s Congress Standing Committee at its bimonthly meeting this week. The committee handles the bulk of the congress’s legislative work outside of the full body’s annual two-week session. Cooperative agreements between Chinese and overseas colleges, hospitals and sci-ence and engineering research in-stitutes will continue to be handled under separate regulations.

Responding to some cr it i-cisms, the new draft would allow foreign NGOs to set up branches

in multiple locations, eliminate a five-year limit on operating in China, and remove restrictions on hiring volunteers and staff.

It says the foreign NGOs would no longer need to seek approval for occasional programs but their Chinese partners need to register with local authorities 15 days be-fore the activities.

The draft says the foreign NGOs, whether running permanent of-fices or operating occasional pro-grams in China, generally would not be allowed to recruit new

members except for those sanc-tioned by the state council. That’s mainly because China is encourag-ing its scientists to join influential international organizations on science and technology. Of great-est concern to foreign groups and governments has been the naming of the Public Security Ministry as the overall body to govern foreign NGOs, something seen as casting those groups under undo suspicion. Those critics have suggested that the Civil Affairs Ministry would be a more logical oversight body.

Critics fear the law may lead to an onerous degree of scrutiny over administrators, with Xinhua saying police could bring investigations at will and demand the termination of any cooperation program “consid-ered to undermine state security.”

“Overseas NGOs, which engage in illegal activities including those to subvert the state and split the nation, will be blacklisted by police and banned from operating on the mainland,” Xinhua said. AP

GERMAN PUBLIC WORKERS STAGE SHORT STRIKES AHEAD OF TALKS BERLIN—German public workers are ramping up the pressure ahead of a new round of wage negotiations. Strikes are taking place on Tuesday at a variety of places, including kindergartens and swimming pools. Garbage pickup and street cleaning in Munich and Luebeck administrative offices are also affected. AP

MYANMAR MILITARY CHOPPERCRASHES, TWO PILOTS RESCUED YANGON, Myanmar—A military helicopter crashed into a reservoir in Myanmar during a training exercise on Tuesday and both pilots were rescued by fishermen, the armed forces newspaper reported. AP

FIRE GUTS NATURAL HISTORYMUSEUM IN INDIA’S CAPITAL NEW DELHI—A massive fire on Tuesday gutted the National Museum of Natural History in India’s capital, one of the country’s top museums, an official said. Firefighters took more than four hours to douse the blaze, which started on the top floor of the six-story museum, New Delhi fire official Harinder Singh said. Thirty-five fire engines were called. AP

BP SEES Q1 EARNINGS SLIDEAS LOW OIL PRICES TAKE TOLLLONDON—British energy producer BP saw its first-quarter earnings slump by 79 percent as lower gas and oil prices continued to take their toll. The company reported ON Tuesday that its underlying replacement cost profit—the oil industry standard, which excludes non-operational items and the value of oil inventories—dropped to $532 million, from $2.58 billion in the first quarter of 2015. AP

WALT DISNEY CRUISE SHIP RESCUES THREE FUGITIVES OFF COAST OF CUBA NEW ORLEANS—A Walt Disney Co. cruise ship has rescued three fugitives off the coast of Cuba who were wanted in New Orleans. US Marshal Amos Rojas Jr. said in a news release that last Thursday, the Disney Fantasycruise ship found the fugitives clinging to a capsized boat. AP

UKRAINE MARKS 30 YEARS SINCE‘86 CHERNOBYL NUCLEAR DISASTER KIEV, Ukraine—Ukraine is marking the 30th anniversary of an explosion at the Chernobyl nuclear plant, the world’s worst nuclear disaster. A vigil was held at midnight on Monday in the Ukrainian town of Slavutych where many former Chernobyl workers were relocated. AP

PM HUN SEN: ALL CAMBODIANSMUST HELP DEAL WITH DROUGHT PHNOM PENH, Cambodia—Cambodia’s prime minister says society must mobilize to help deal with the worst drought in at least four decades, which has left about two-thirds of the country’s 25 provinces short of water for drinking and other necessities. Hun Sen said on Tuesday in a speech in the northwestern province of Banteay Meanchey that the armed forces, civil servants, the Red Cross and political parties must all pitch in to ensure that adequate water supplies reach people. AP

NORTH KOREA PUTS MIDRANGEMISSILE ON STANDBY, REPORT SAYSSEOUL, South Korea—North Korea is believed to have placed a new, powerful midrange missile on standby for an impending launch, a news report said on Tuesday. The reported launch plans came two days after North Korea said it had successfully test-fired a ballistic missile from a submarine in a continuation of its weapons tests amid ongoing South Korea-US military drills. AP

South Korea’s economy grows 2.7 percent, slowest since July SEOUL, South Korea—South

Korea’s economy expanded at its slowest pace in three

quarters during the first three months of this year, as exports and domestic demand sagged due to subdued global demand and heavy household debts.

The Bank of Korea said on Tuesday that Asia’s fourth-largest economy grew 2.7 percent during the first quarter over a year ear-lier and just 0.4 percent from the previous quarter.

The results were the worst since the third quarter of 2015, when private consumption and tourism took a big hit from the spread of the deadly Middle East respiratory syndrome. Growth

in July to September was 2.8 percent year-on-year. Govern-ment efforts helped boost private consumption late last year and early this year the authorities tried to aid recovery by cutting consumption tax cuts and by front-loading the budget.

But the latest results showed that those measures fell short of reviving domestic demand as high youth unemployment rates and hefty household debts pres-sured consumer spending. Weaker exports and capital spending also weighed on growth.

The economy will likely face more headw inds in the near term as the government pushes to restructure some shipping

companies, shipyards and other unprofitable firms.

That could drive up unem-ploy ment rates a nd f u r t her pressure household spending. Steelmakers and shipbuilders used to fuel growth for South Ko-rea’s export-driven economy but due to weak global demand and heightened competition from China, they have been mired in massive losses.

Last week the central bank cut its annual growth forecast by 0.2 percentage points to 2.8 percent.

The bank held off from low-ering the key interest rate from the record low of 1.5 percent this month. But expectations are mounting for a rate cut. AP

CONSTRUCTION workers set up a stage in Seoul, South Korea, on April 26. South Korea’s economy expanded at its slowest pace in three quarters during the �rst three months of this year, as exports and domestic demand sagged due to subdued global demand and heavy household debts. AP

N EW DELHI—The bank ex-ecutive, the book publish-er and the social worker

had one thing in common: Their hectic lives in the crowded Indian capital had become so chaotic and stressful, they’ve turned to chant-ing Buddhist mantras in search of calm.

The practice is catching on among India’s well-off urban pro-fessionals, growing by word of mouth as a way to relieve stress. Most of those picking up the prac-tice are Hindu, but they say they see no conflict between their re-ligious beliefs and the chanting. Some say it is soothing, others invigorating. “I feel it just makes me a better human being, more humane,” says Gaurav Saboo, 34, a devout Hindu working at an in-ternational bank in New Delhi. “It enables me to understand the suffering of others and reach out to others.”

Buddhism, he says, “is a phi-losophy, a way of life,” and the chanting has brought a positive energy into his life.

While Buddhism began on the Indian subcontinent around the 5th century BC, it has waned in both India and Nepal while flour-ishing in different forms in Japan, Thailand, Sri Lanka, Cambodia and other countries. With its easy rituals and lack of dogma, Bud-dhism has long-drawn supporters from afar. Hollywood celebrities, agnostics, Christians and Jews alike attend Buddhist spiritual retreats. Archi Sharma, a house-wife who took up chanting a year ago, says she was “searching for some meaning” in her life when she heard about Buddhist chant-ing from friends. “I felt there was a vacuum in my life,” Sharma said. “The chanting has helped. It stops you thinking about me, myself. It makes one think of others first.”

Sharma, who chants twice a day between household chores and taking care of an ailing relative, said she saw no conflict between her family’s traditional Hindu be-liefs and her chanting. “The chant-ing is not invasive and runs paral-lel to what we practice as Hindus,” she said. “It opens a doorway to another stream of happiness into one’s life.”

The practice of repeating a man-tra is not exclusive to Buddhism. Many across Hindu-dominated In-dia also include chanting as part

of their yoga, and some Christian groups repeat chants.

While Hindu chanting is often associated with religious rituals, Buddhist chanting is seen as less dogmatic, aimed at calming the nerves or feeling a sense of well-being, said New Delhi-based soci-ologist Abhilasha Kumari.

“Hindu chanting is linked to re-ligious ritual,” she said. “Buddhist chanting is a free space where you chant and are not tied down to other aspects of religiosity.”

Many Indians who have picked up chanting have been drawn to sessions organized by Soka Gakkai International, the lay organization of a major Nichiren Buddhist sect whose stronghold is in Japan. The group traces its roots to the chants and teachings of a 13th-century Japanese monk named Nichiren.

The group has not been engaged in an active campaign to promote chanting in India, although it claims to have introduced the practice to around 100,000 Indi-ans since setting up in the country in 1986, according to the group’s office in New Delhi.

Practitioners chant individu-al ly but many meet monthly. Many say that apart from easing their own stress, the chanting also makes them understand people around them and working for the happiness of others.

At a recent gathering in a middle class New Delhi neighborhood, participants shucked off their shoes and quietly sat down on thin mattresses in the basement of an apartment building. They faced an ornate wooden altar holding a scroll on which the words they will chant for the next hour are writ-ten: “Nam-Myoho-Renge-Kyo,” which refers to the law of cause and effect.

Latecomers seamlessly joined in, blending their chant with the ongoing rhythm. Soon the incan-tation picked up speed, building to a crescendo and then slowing again, while the chanters recov-ered their breath. Faintly, there was the clicking of wooden beads that the chanters used to help fo-cus their thoughts on the mantra. Every now and then, one of them struck a gong.

“You feel invigorated. It’s a great feeling,” said Ruma Roka, 54, at the end of the chanting session as she and the others moved to another room for discussions over tea. AP

Indians take to Buddhistchanting to alleviate stress

15 daysThe number of days the Chinese partner of a foreign non-governmental organization in China needs to register with local authorities before holding any activity

BEIJING—China’s national legislature is poised to vote this week on a draft law criticized by

overseas governments for tightening controls over foreign non-governmental organizations (NGOs) by bringing them under direct police supervision.

Wednesday, April 27, 2016 •Editor: Angel R. Calso

OpinionBusinessMirrorA10

Bringing cheap medicines to far-flung communities

editorial

WARMEST wishes for success to Generika Drug-store for its plan to expand to the country’s far-flung areas in the next few years. To this day large masses of our countrymen who live

in areas remote from urban centers remain without access to medicines, much less to inexpensive drugs. The arrival of Ge-nerika in their communities will help solve life-and-death issues for them. Generic drugs are about 85 percent to 90 percent cheaper than branded drugs.

Generika Drugstore, to recall, is the third-largest player in the country’s pharmaceutical industry, one-half of which is now owned by Ayala Corp. The other players are Mercury Drug, the country’s top pharmaceutical firm, and Generics Pharmacy, the country’s largest generic-drugs retailer. With Ayala resources backing it up, Generika Drugstore is pursuing a five-year develop-ment plan that will add to its current network of more than 600 stores, 152 stores this year and an average of 100 more annually in the next few years.

The Philippines, as noted in this space earlier, has one of the highest price levels for medicines in the developing world. Drug prices in the Philippines are typically 10 times higher than in India and, by slightly lesser extent, than in Pakistan, Thailand, Malaysia, Indonesia, and other South and Southeast Asian countries. One reason for this state of affairs is that the pharmaceutical industry in the country is basically an oligopoly, whose members have become accustomed to invoking patent or intellectual-property rights to perpetuate their tight grip over the country’s pharmaceutical industry. The entry of an Ayala-led Generika Drugstore would help break this stranglehold and bring inexpensive medicines to poor communities.

As noted by Teodoro Ferrer, Generika president and chief executive officer, who owns the other half of Generika, some 12 years ago no one bought generic drugs. But through Generika’s constant education, the public was convinced that it was safe to take generic medicines. Now, even the largest drugstore, Mercury Drug, has changed its business model from exclusively selling branded products to selling generic drugs, as well.

The education of the public to the virtues of generic drugs may well be the most important of Generika’s contributions to public welfare in our country. It helps solve the public’s medical issues and income problem, as well.

Generika’s development plan, according to Ferrer, includes not just the increase of the number of its stores in the next five years but the expansion of the product line to include food supplements, health care and wellness products. It also includes building clinics and wellness centers in appropriate areas. Right now Generika is putting up retail clinics in the country’s major cities to cater to middle-class health-care consumers. Later, it may expand to other countries in Southeast Asia to take advantage of market opportunities that can be expected to open up in view of Asean’s economic integration. That plan is not a priority, however.

Generika Drugstore’s five-year development plan is responsive to the peo-ple’s needs. May it be rewarded with resounding success.

UNDER the existing rules of the Social Security System (SSS), sickness and maternity benefits are paid in advance by the employers to their qualified employees, to be reimbursed

later by the SSS.

Sickness and maternity benefits through the bank

In the past, sickness and mater-nity benefits reimbursements were paid in the form of checks sent via registered mail to the employer. To-day, all benefit reimbursements are paid through the employer’s bank account. All employers, big or small, including household employers, are required to enroll their savings or current account in the new sickness and maternity benefit payment sys-

tem. All claims for reimbursements are then paid through the employer account. Each time a payment is made, the employer will be notified through a payment advice. This new system is safer, faster and more con-venient for the employer.

To enroll in this payment system, the employer may download the enrollment form from the SSS web site, visit the nearest SSS branch or

get the form from an SSS-accredited bank. There are at least 29 commer-cial and rural banks participating in this program.

The employer should accomplish the enrollment form in two copies. The bank account signatory specified in the enrollment form should be the official designated by the employer or the company’s board of directors as its authorized signatory appearing in the bank’s record. The enrollment form should be signed by the autho-rized company official who is certi-fied by the employer in the Specimen Signature Card (SSS Form-L501) as the designated signatory.

After accomplishing the enroll-ment form in two copies, the em-ployer then submits the form to its designated SSS-accredited bank. The bank shall then certify to the correct-ness of the bank-account informa-tion and then forward the enroll-ment form to the SSS for processing.

The status of the enrollment in the program may be verified online through the My.SSS facility provided the employer is registered.

As soon as the enrollment is completed, all employer requests for reimbursements of sickness and maternity benefits will then be paid through the employer’s bank ac-count.  If there are any changes in the bank-account information or closure of the bank account, the employer should notify the SSS as soon as pos-sible to avoid delay in the processing of reimbursement claims.

For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55, which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays.

Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send com-ments about this column to [email protected].

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All About Social SecuritySusie G. Bugante

Atty. Dennis B. Funa

INSURANCE FORUM

Catastrophe risk and parametric insurance

PARAMETRIC insurance has been defined as “a type of insur-ance that does not indemnify the pure loss, but ex ante agrees to make a payment upon the occurrence of a triggering event.

The triggering event is often a catastrophic natural event that may ordinarily precipitate a loss or a series of losses. But parametric insur-ance principles are also applied to agricultural crop insurance and other normal risks not of the nature of disaster, if the outcome of the risk is correlated to a parameter or an index of parameters.”

It has also been defined “as an in-surance contract where the ultimate payment or contract settlement is de-termined by a weather or geological observation or index, such as average temperature or rainfall over a given period or the intensity of an earth-quake or wind storm. Parametric insurance payouts are not based on individual loss adjustments, but are determined according to the mea-surement of a highly correlated in-dex. Therefore, there is the potential for a mismatch between parametric insurance claims settlement and the actual losses of the insured, which is generally referred to as basis risk.”

In 2011 losses due to catastrophic events totalled $116 billion, the sec-ond most costly for the insurance in-dustry. In most catastrophic events, only 20 percent to 40 percent of the damage are insured. In terms of risk transfer, the risks are transferred from the national government to the parametric insurers or reinsurers.

Parametric insurance is generally

applied to natural catastrophic perils, such as earthquakes, flood-ing and hurricanes, and agricultural risks. Payments are made based not on the actual losses but at the occur-rence of certain parametric triggers, or index-based triggers (or index measures), at specified levels. It is not indemnity based where the sum insured is based on the loss sustained by the policyholder, such as in fire insurance. For example, in insuring drought as the risk event, the index measure may be the amount of rain-fall or the area-yield production in-dex (crop yield). For hurricanes, the index measure may be data obtained from the National Oceanic and At-mospheric Administration (NOAA). And for earthquakes, it may be by Richter scale readings or data from the US Geological Survey (USGS). The occurrence of these triggers is easily determinable whereas the determination of actual losses will have to be actually determined and quantified. As a result, payment of

benefits is easier and faster. Without parametric insurance, adjusters will have to determine each and every loss, which inevitably will lead to delays and sufferings. In the Philip-pines the Insurance Commission has approved weather index-based insur-ance, such as the Typhoon Guard Pol-icy and the Drought Weather Index-Based Crop Microinsurance Policy.

An example of a parametric insur-ance is GlobeCat established by Swiss Re. It addressed windstorms in the United States, earthquakes in Cali-fornia, Guatemala and El Salvador. Risk analysis is usually studied by engaging a risk modelling compa-nies. Another scheme developed by the World Bank, with a funding as-sistance from Japan, is the Caribbean Catastrophe Risk Insurance Facility (CCRIF) in 2007. Swiss Re is a colead reinsurer of CCRIF. What is interest-ing about CCRIF is the participation of 16 Caribbean nations, thereby creating the world’s first regional (or multinational) parametric insur-ance. It had a maximum coverage of $100 million for each peril. It covered earthquake and hurricane perils. It retains a portion of the risk and reinsures the rest. During the risk modelling to estimate damages, the USGS was tapped for the earthquake modelling and NOAA was used for the hurricane modelling. The CCRIF was developed by the World Bank in the aftermath of Hurricane Ivan in 2004. The hurricane impacted 200 percent of the annual GDP of both Grenada and the Cayman Islands in the Caribbean. The Cayman govern-ment suffered a $36.7-million budget deficit, the largest in its history. Poli-cies that may be written by CCRIF

are, however, capped at 20 percent of a country’s total estimated losses.

In November 2007 a 7-magnitude earthquake hit Haiti and CCRIF paid $8 million in insurance benefits. Other examples would include the Central America Natural Disaster Insurance Facility, also developed by Swiss Re in partnership with the Inter-American Development Bank (IDB); the MultiCat Mexico devel-oped by Swiss Re together with the World Bank; the Malawi Weather Insurance, where Swiss Re commit-ted to pay a maximum amount of $5 million to the World Bank, which, in turn, pays the Malawi govern-ment for drought-related damages in corn production. The World Bank has emerged as a leader in financing catastrophe risks.

Another financial risk-transfer tool that has emerged in the 1990s is Catastrophe Securitization, or the issuance of catastrophe bonds. In broad strokes, Daniel Peterson ex-plained in a paper the concept, thus: “These products operate essentially as futures contracts with paramet-ric triggers; if the contracted event occurs, meeting predetermined thresholds [e.g., surface wind speed], a certain amount of the investment [perhaps all of it] goes to the issuing insurer in order to offset its payouts to policyholders as a result of the event. However, if the event does not occur within the contracted time pe-riod, the principal is returned to the investor, with a high rate of interest.”

Atty. Dennis B. Funa is currently the deputy insurance commissioner for legal services of the Insurance Commission.

E-mail address: [email protected].

Wednesday, April 27, 2016

[email protected]

COCO farmers can now potentially earn over P3 million per hectare or even P10 million per hectare with a revolutionary but simple approach to coconut farming, by adopting age-old

technologies that were kept from farmers unwittingly to protect the colonial copra-oil mill trade nexus.

Coco farmers can earn over ₧3 million per hectare

FROM the following comments, I exclude Miriam. She is in a class all her own. With her parting words—“God preserve our country, starting with me”—she joined the immortals. I am

talking about the rest.

Downer

FREE FIRETeddy Locsin Jr.

carved out of our territory at Ameri-can behest. I guess to contain the terrorists in one place. But why here? Why not Wisconsin? They will be at home there. Supervision of the BBL would go to Malaysia. I guess, in ex-change for some of the $750 million missing from the Malaysian prime minister’s bank account. Duterte even said it is only his-torical justice because Ferdinand Magellan stole Mactan from Lapu-Lapu. I thought Magellan failed in that; he was even killed in the at-tempt. But, okay, give them Mactan, which has an airport already. That way Islamic terrorists can fly across the Pacific and hit the other side of the United States. Everyone committed to end “con-tractualization”—hiring and firing before people become permanent. But Mar had to say it is legal, so we need to go to Congress. But Jejomar “Jojo” C. Binay a better lawyer than the one Mar keeps by his side, proved it is illegal per se. On the South China Sea, they all agree: never to send the people we pay to fight—to fight there. Wow! Wowoweee! So why don’t we turn our soldiers and marines into care-givers? Duterte added what I long ago proposed. P-Noy should get on the del Pilar and sail to the reefs.

Rody will go in a jet ski. Smart, smaller target. Let us see if China will dare to turn the South China Sea from what it is becoming already—a Chinese lake—into a Chinese toi-let in which the only turd floating is China by hurting the Philippine president. And finally, there was Grace Poe’s big mistake. By raising the issue—of—jocular—rape, she let Duterte explain it. Sure, he has a dirty mouth, but he also has a trigger fin-ger. The safest place for women—or anybody for that matter—is Davao. By erasing the differences be-tween the candidates (by frighten-ing them all into their best behavior) Sunday’s debate erased all hope of real change. Now we can vote for anyone because we should vote for no one in particular. They are all fun—and pandemically da same. By his sobriety, Duterte regained lost ground. But Mar gained new ground by erasing the differences be-tween himself and the rest—with the same practical and weak solutions. “Radical” solutions only make good sound bites, but not much sense, is one way of looking at it. So Mar is in the running, right alongside near identical candi-dates—except on peace and order. But that is for another day.

ON THE CONTRARYMichael Makabenta Alunan

Sunday’s debate stripped the candidates of their public-relations images and made them all the same. Indeed, in a manner that screamed for laxatives, all the candidates tightened their a___ out of fear of making mistakes. They put their best foot forward, and their worst foot back—like dancing ballet; so gay. They gave the blandest solu-tions to the most crying problems. That showed there are no substan-tial differences between them, not even temperament. Even Rodrigo “Rody” R. Duterte threatened, but only meekly.

Traffic and the stalled Metro Rail Transit, a bane once the exclusive preserve of Manuel “Mar” A. Roxas II, is now a burden shared by all the candidates. Every proposal of the

candidates only showed their inabil-ity to solve them quickly. And Mar added that the long-term solution has already started—under the ad-ministration that caused the prob-lem. Or so we thought. Until Duterte shifted the blame to too many cars on the roads. Hindi pala kasalanan ni P-Noy. All the candidates admitted that the problem is beyond any but patchwork solutions: like no pri-vate parking on highways—which is sooooo baaaduuuuy. Miriam had the grandest solution: move the city elsewhere. By then, even millenni-als will be dead.

All the candidates supported the Bangsamoro basic law (BBL), which Ferdinand “Bongbong” R. Marcos Jr. totally discredited. The BBL sought to create a caliphate for terrorism

Traditional coco trade kills sector. For many centuries, the coconut was considered the “Tree of Life,” but be-cause of colonialism, which is a lop-sided extractive one-way system of sucking the sap of the local economy as a mere raw-material exporter, the coconut farmers have been reduced to poverty, being totally dependent solely on copra.

Jun Castillo, a social entrepre-neur leading this coconut economic revolution, calls this “copra-for-oil” dependence as the “rape” of the in-dustry that has laid waste to 3.4 mil-lion hectares of coconut lands and impoverished 3.5 million farmers earning only P10,000 each a year, or P25 a day.

Castillo runs the one-of-a-kind exotic Coco House that showcases scores of products from coconuts and a chain of ice-cream outlets us-ing coconuts, not dairy. He estimates roughly that, out of the low yield of “15 billion nuts produced a year, about 10 percent, or 1.5 billion nuts, are eaten; another 10 percent, or 1.5 billion nuts, are used by desiccators; and 12 billion mature nuts are used to produce copra.”

Life from coco water? “Of these 12 billion nuts, 95 percent to 98 percent of the coco-water content is thrown away with the meat left to dry in the sun exposed to elements, parasites and to carcinogenic afla-toxin growth. This dried meat, called copra, is sold to oil mills and undergo “refining, bleaching and deodorizing to produce coconut oil,” Castillo said.

Of this volume, 4 billion liters of coco water can be produced, which is more nutritious than fresh “buko water.” Many do not realize this can be processed into other products.

He reveals that, by boiling mature coco water, one can produce, after evaporation and varying levels of heat, “coco-not-soy” sauce and “coco patis,” which are common condi-ments in all Filipino households. This 4 billion liters of coco water, he says, can produce 200 million liters of coco-not-soy sauce.

Sweet returns from nectar. The bigger business is the production of “sweet coconut nectar,” coming from the sap of flowering coconut seeds, similar to how tuba (coconut wine) is harvested, but this time with bet-ter techniques enabling farmers to harvest nectar, but still allowing the small nuts to mature.

About 2 liters of nectar can be pro-duced per tree per day and collected three times a day, which is signifi-cant, as this will generate daily jobs, unlike the copra-dependent system, wherein harvesting and work only happens every 45 days.

At current farm-gate prices of P25 per 350 milimeter of coco nectar, or about P75 per liter, a farmer produc-ing conservatively 1 liter per tree per day—at 100 trees per hectare on the average—can earn P7,500 a day, or P225,000 a month, or P2.7 million, or almost P3 million a year. And that’s from selling raw nectar alone.

Retail price of raw nectar hovers at about P50 to P60 per 350 ml, but golfers pay as much as P80 per 350 ml, Castillo revealed.

Much sweeter with coco sugar. But because farmers produce so much and cannot sell all as raw nec-tar, the bulk of their produce must be processed into other products from coco honey to coco sugar, etc. For coco sugar alone, farmers can earn much at the current price farm gate of P200 per kilo. This is easily pro-duced through simple boiling, with the 85 percent water evaporating,

leaving behind the 15 percent as crystallized coco sugar.

Prices of coco sugar are still high, as there is not enough volume pro-duced yet. Castillo laments, however, that only a few rich have taken advan-tage of this rediscovered knowledge and technologies, but have used these technologies more for themselves and little to the benefit of coconut farmers on a mass scale. There are many other products, like virgin coconut oil, or the richer nondairy vegetarian coco cream, which Castillo uses in producing his brand of ice cream. There are also oth-er products from other parts of the coconut tree, which, if fully tapped, will, indeed, make the coconut live up to its name as the Tree of Life.

Go nuts with coco. Castillo said if the farmer can already get rich from existing low average yields of 49 nuts per tree, more would go nuts with the potentials of increasing yields to 300 nuts per tree through fertilization and irrigation. Even old senile nuts can increase yields substantially, but we need to plant more trees, owing to its vast poten-tials, he added. You are not talking, yet, about in-creasing density of trees planted per hectare, or optimizing the empty idle spaces in-between trees that could be planted to other multicrops, or allot-ted for small livestock like goats or high-value free-range organic chick-en. Thus, the potentials of earning P10 million per hectare is possible, fellow advocate Rey Sabio said. Castillo is, thus, heading a move-ment pushing what he calls the “New Coconut Economy.” It is just lamentable everyone, including the presidentiables squabbling over a P70-billion coco levy. Some idiots even want to redistribute this P70 billion cash amount, or want to get a slice of the pie, when the logical direction is to forget about the levy, and the hundreds of billions in other assets from the coco levy, but allocate new funds to organize and empower farmers into cooperatives to rebuild the industry again.

Wipe out poverty through Coco? If Vietnam reduced poverty from 60 percent to 20 percent in only 20 years, we can do it in five years. We must reallocate resources toward the countryside, including coco regions, as well as learn from Franklin Roos-evelt on how he created 4 million jobs in a month’s time at the height of the Great Depression in the 1930s.

We can do the same in the coco-nut industry, but it will be faster if the government helps out, but not help the farmers out of business, as it normally protects some vested interests.

For typical farmer Ka Teddy Amor, 75, vice president for the Visayas of the Pambansang Koalisyon ng Mag-sasaka nang Niyugan, the govern-ment has, likely, promised them for many decades “castles in the air” to no avail. They have also been mis-led by the Left to break down gov-ernment’s proverbial “castles” of promises through insurgency with the same promises of a better shar-ing of the pie, only to lose lives and their livelihoods, with thousands of them migrating to Metro Manila to escape rural misery, only to end up in urban poverty.

It seems only a Jun Castillo can enlighten them to the right path of genuine empowerment—economic liberation.

You may reach Michael Alunan at e-mail [email protected].

B C BBloomberg View

FOR years now, China’s been lavishly  courting friends across the developing world.

Chinese leaders, in pointed contrast to their Western counterparts, tra-verse the globe with bursting wallets, doling out aid, cheap loans and infra-structure deals in an effort to procure both influence and raw materials. Commodity-dependent countries get cheap financing for development, de-spite their often dodgy credit ratings; China gains diplomatic clout and a bargain on those commodities. Both sides win—that is, until they don’t.

The perils of this strategy are quickly becoming apparent. In re-cent years, changes of government in countries such as Myanmar and Sri Lanka have led to questions about deals signed with China under previ-ous administrations. Now, Venezu-ela’s slow-motion meltdown is expos-ing just how terrible these deals can be for both borrowers and for China.

Over the past decade,  China

has lent  more than $60 billion to Venezuela to keep the country afloat and help President Nico-las Maduro remain in power. The loans were largely structured to be repaid not in cash, but in oil. At the time, they seemed to make sense for both parties: Venezuela got funding at preferential rates; China gained an ally and secured a reliable source of oil, which then topped $100 per barrel.

Now that oi l pr ices  have plunged  to a third of their highs, however, Venezuela is struggling to meet its massive debt obligations. The country needs to ship three times as much oil as it did just 18 months ago in order to pay China back on schedule, effectively tripling its cost of borrowing in real terms.

That’s sparked a vicious cycle. Since China has first claim on Ven-ezuela’s oil exports, the country has very little leftover to sell elsewhere. According to some estimates, oil accounts for more than 95 percent of export revenue and nearly half of all public revenue in Venezuela.

Shrinking sales are limiting the coun-try’s ability to fund repair and main-tenance of its oil fields, let alone re-pay its debts to lenders other than China.  Efforts to expand production risk adding to the current global glut of oil, depressing prices further.

Meanwhile, China’s struggling to digest all the oil being imported from Venezuela and elsewhere. Hav-ing apparently topped up its strategic reserves, China has turned to less conventional methods for storing oil while new repositories are built. The seas off its coastline now feature the highest concentration in the world of oil-filled tankers. Given the histori-cally low cost of shipping, this may provide a short-term solution, but it’s hardly sustainable.

Chinese oil producers, too, are suf-fering from low prices no less than Venezuela is. To prevent those com-panies from incurring large losses, the Chinese government recently announced a  domestic price floor. So consumers aren’t even benefiting from all the cheap oil flooding in.

China now faces an ugly choice:

either prop up a political ally with more cheap loans that may never be repaid, or suffer a default and massive losses. The irony is that there was never any need for Chi-na to exchange its loans for oil, a freely traded global commodity available on the open market. In-deed, the only known example of a nation refusing to sell a global commodity came in 2010, when China temporarily cut its exports of rare-earth metals.

China’s best bet at this point may be to restructure its loans to ease the burden on Venezuela, extending the terms of repayment to allow the Latin American country to increase cash flow now. A certain degree of price flexibility could be built into the deal, so that China could still buy discounted oil if prices unex-pectedly rise in the next few years. Given the volatility in commodity markets, that should provide Chi-nese leaders some welcome reas-surance. The alternative may be an outright default that loses China an ally, as well as oil.

Winning friends is an expensive business

A12

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2Wednesday, April 27, 2016

‘Slower imports growth in Feb still a good sign’

TROOPS HUNT DOWNEXTREMISTS WHOBEHEADED CANADIAN

B C O @caiordinario

FILIPINOS’ penchant for imported consumer goods and dependence on imported materials needed in

manufacturing and other sectors are expected to help boost the country’s import receipts in the next few months. 

National Economic and Develop-ment Authority Director General and Economic Planning Secretary Emmanuel F. Esguerra made this forecast, after the Philippine Sta-tistics Authority (PSA) reported on Tuesday imports growth slowed to 1.2 percent in February, from 10.2 percent in the same month last year and 30.8 percent in January 2016. 

“This growth indicates that amid a global economic slowdown, domestic demand, especially in-vestments, remains strong. This will likely continue to drive im-ports growth within the short term,” Esguerra said. “Govern-

ment’s spending program needs to gain traction, particularly in the infrastructure sector, which will require higher importation. Bottlenecks in Manila’s ports must also be given serious attention to further bring down the cost of

imported goods for domestic busi-nesses and consumers.”

Total payments for imported goods rose to $5.41 billion in February, from $5.35 billion in the same period last year. This widened the country’s trade deficit in Feb-ruary to $1.1 billion, from $837.37 million in the same month last year. However, Esguerra said among 11 selected Asian economies, only the Philippines posted positive imports growth in February 2016. Thailand, South Korea and China saw the steepest declines. Data also showed that the coun-try’s consumer goods imports in-creased by 26.3 percent to $934.2 million in February 2016.  This was due to the increase in payments for both durable goods at 39.4 percent and nondurable goods at 13.9 percent during the period. With $2.2 billion worth of im-ports, inward shipment of capital goods grew by 57.5 percent in Feb-ruary 2016, the sixth consecutive month of double-digit growth for this commodity group. “The continued strong imports growth of capital goods shows the

country’s attractiveness to both local and foreign investors, par-ticularly in the manufacturing sector. This also indicates a robust economic activity that is primarily supported by the country’s strong macroeconomic performance. The robustness of growth is reflected in the continuous upgrade and af-firmation of the country’s invest-ment-grade rating since 2013,” the Cabinet official said.

Data from the PSA showed the country’s top 10 imports for Febru-ary 2016 reached $3.87 billion, or 71.4 percent of the total import bill.

The country’s top import by com-modity group in February is elec-tronic products, which accounted for 28 percent of the total import bill. Payments for this segment reached $1.52 billion, a contrac-tion of 14.8 percent from last year’s $1.78 billion.

Components/Devices or Semicon-ductors accounted for 19.2 percent of total electronic-product imports. However, payments for semiconduc-tors declined by 28.3 percent to $1.04 billion in February 2016, from $1.45 billion in February 2015.

$5.41BTotal import payments in February, up 1.2 percent from the same month last year

THE Philippine military has come under increased pressure to rescue more than 20 foreign

hostages, after their Muslim extremist captors beheaded a Canadian man. Related story on B7 The military, however, faces a dilemma on how to go about that, and also ensure the safety of the remaining captives. The Abu Sayyaf extremists behead-ed John Ridsdel on Monday, spark-ing condemnations and prompting a pledge by Canadian Prime Minister Justin Trudeau to help pursue the ex-tremists behind the “heinous act.” Philippine security officials said on Tuesday “there will be no letup” in the effort to combat the militants and find the hostages, even though so far they have had little success in freeing them. Ridsdel was kidnapped with a fellow Canadian, a Norwegian and a Filipino woman last year, adding to the Abu Sayyaf’s trove of hostages. Trudeau said his government will work with Philippine authorities and international partners in pursuing those responsible for the heinous act. Two men on a motorcycle left Rids-del’s head, placed inside a plastic bag, along a street in Jolo town in Sulu prov-ince and then fled, Jolo police chief Supt. Junpikar Sitin said.

Abu Sayyaf militants had threat-ened to behead one of three men—two Canadians and a Norwegian—they kidnapped last September from a marina on southern Samal Island if a large ransom was not paid by 3 p.m. on Monday (0800 GMT). Jolo Mayor Hussin Amin con-demned the beheading, blaming Abu Sayyaf militants, who have been implicated in past kidnappings, be-headings and bombings. “This is such a barbaric act by these people, and one would be tempted to think that they should also meet the same fate,” Amin said by telephone. Philippine forces were moving to rescue the abductees, also including a Filipino woman who was kidnapped with them, as the Abu Sayyaf’s dead-line for the ransom payment lapsed, the military said. The militants reportedly demanded P300 million ($6.5 million) for each of the foreigners, a reduction from their earlier demands. The hostages were believed to have been taken to Jolo Island in Sulu, a jungled province where the militants are thought to be holding a number of captives, including 14 Indonesian and four Malaysian crewmen, who were abducted at gunpoint from three tugboats starting last month.. AP