BusinessMirror December 11, 2015

Citing his company’s latest mobil-ity report, Ericsson Philippines and Pacific Islands Head Sean Gowran said smartphone-subscription penetration is expected to reach around 70 percent for the Philippines in 2018. “ This year smartphone-sub-scr ipt ion penet rat ion for t he

country is  estimated at around 40 percent and we see this grow-ing to around 70 percent by 2018. United Nations data state that the urban population of the country is at 44-percent level, so we can expect that, by 2018, smartphone-subscr ipt ion penet rat ion w i l l

By Lorenz S. Marasigan

With data requirements in the Philippines expected to balloon in the next three years—at least

according to a market study conducted by Swedish multinational communication technology and services provider Ericsson—local telecommunications companies must start fully utilizing a precious, yet underutilized, frequency band to wholly harness the gains that such an asset holds.

By Cai U. Ordinario

ImPlEmENTaTIoN of “bolder” policies is needed to further boost jobs growth in the country, according to local economists. 

This, despite the improvement in the latest employment num-bers released by the Philippine Statistics authority (PSa), which showed the country’s unemployment rate fell to 5.6 percent, the first time it dropped to below 6 percent in a decade. University of the Philippines School of labor and Industrial Rela-tions (Solair) Center for labor Justice (ClJ) Director Rene ofreneo said the country continues to struggle with the lack of sufficient and decent employment.  “Growth remains consumption-led with oFWs [overseas Fili-pino workers] and call center-BPo [business-process outsourcing employees] buying up condos, new offices and consumer goods. But growth remains uneven. Quality of jobs of many [are still] poor. [There is a] need [for] bolder policies for more and better jobs,” ofreneo said. University of asia and the Pacific School of Economics Dean Cid Terosa said that, while the improvement in the latest jobs data can be attributed to the work put in by the aquino administration, the efforts of the private sector must also be recognized.  Terosa, however, added that there is a need to study the

PESO ExchangE ratES n US 47.1530 n jaPan 0.3884 n UK 71.6018 n hK 6.0838 n chIna 7.3355 n SIngaPOrE 33.5585 n aUStralIa 34.0578 n EU 51.9909 n SaUDI arabIa 12.5691 Source: BSP (10 December 2015)

www.businessmirror.com.ph n Thursday 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 6 sections 34 pages | 7 days a weekn Friday, december 11, 2015 Vol. 11 No. 64

A broader look at today’s businessBusinessMirrormEDIa PartnEr Of thE yEar

2015 EnvIrOnmEntal lEaDErShIP awarD

UnItED natIOnSmEDIa awarD 2008

exceed the urban population,” he said. Gowran also reported that with this high subscription penetration, in the coming years, rural areas will become more important. “To realize the full potential for local market, service providers and device manufacturers will need to ad-dress existing challenges around avail-ability, affordability, and on increasing consumers’ levels of awareness on the benefits of smartphones and mobile data,” he added. In order to do this, the Philippines must take proactive actions in harmo-nizing the 700-megahertz (mHz) band to fully utilize this digital dividend. Groupe Speciale mobile association (GSma) stressed the need for asia-Pacific countries to allocate the 700-mHz band to mobile broadband use immediately to take advantage of its socioeconomic benefits. It found that further delays in the use of the spectrum could result in billions of dollars worth of losses in incremental GDP growth. François Rancy, director of the

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Unused 700-MHz band stunting digital dividend

Economists: bolder policies needed to boost jobs growth

INSIDE

BOOKED!

liFe d1 Pal: wE’ll fly whErE PInOyS arEBaUTisTa: “The

route will stimulate passenger traffic

along three travel streams—Manila-

Cairns, Manila-auckland, as well as

Cairns-auckland. ”

wORld B2-2

By Ma. Stella F. ArnaldoSpecial to the BusinessMirror

PIONEERING flag carrier Phil-ippine Airlines (PAL) is sharp-ening its marketing tack in a

bid to capture the overseas Filipino market and enhance its bottom line. In an interview with PAL Presi-dent Jaime J. Bautista at the side-lines of the launch of the newly enhanced Philippine National Bank (PNB) MasterCard credit cards, he said, “we’ll fly where the Filipinos are.” Bautista just returned from the successful inauguration of the car-rier’s Cairns-Auckland route, which is operated four times a week (Mon-days, Wednesdays, Thursdays and Saturdays) from Manila using a

156-seater Airbus A320. As of June 2013, about 210,760 Filipi-nos live in Australia, 15 percent of whom are in Cairns, the fifth most populous city in Queensland, while some 44,000 Filipinos live in New Zealand. In a separate news statement, Bau-tista said: “The route will stimulate pas-senger traffic along three travel streams

—Manila-Cairns, Manila-Auckland, as well as Cairns-Auckland. The new service allows Philippine Airlines to cater to the travel needs of business and leisure travelers, and showcase its distinct brand of service marked by Filipino warmth, charm and hospitality. Filipinos residing in New Zealand will find the new service as their convenient link to their home country.” Under the renewed leadership of Filipino-Chinese tycoon Lucio Tan, part of PAL’s mission, Bautista explained, is to be “a source of pride of the country being the flag carrier.” As such, it is im-portant that the carrier also become the airline of choice of the overseas Filipino community, which numbers about 12 million to date, and scattered across the globe.

See “pAl,” A2

argEntinEprEsiDEnt Blasts nEw lEaDErs infinal spEEch

malaysian Pm vows he will not resign over financial scandalEMBATTLEd Malaysian Prime Minister Najib Razak

vowed on Thursday that he will not retreat nor surrender, amid pressure for him to resign over a

$700-million financial scandal. Najib has been under fire since July, after leaked docu-ments showed he received $700 million into his private accounts from entities linked to indebted state invest-ment fund 1Malaysian development Bank (1MdB). The 1MdB crisis has been partly blamed for a sharp plunge in the Malaysian ringgit, which fell to 17-year lows against the dollar in August.

Opening an annual meeting of his ruling Malay party, Najib reiterated that the money in his accounts was a political donation. He said 1MdB debts of at least 42 billion ringgit ($9.8 billion) were being resolved with the recent sale of its power assets to a China company. “I am convinced that I am on the side of the truth, and the truth will eventually prevail,” Najib told more than 2,000 delegates of his United Malays National Organization (UMNO). He said he was aware of efforts to try to remove him and warned that “such treasonous acts” could sink UMNO

and destroy the Malay race. “Even though some may turn against us, even though we are being pushed repeatedly to make us fall, there shall be no retreat, no surrender. No retreat! No surrender!” Najib said. It is the biggest political crisis for Najib since he took power in 2009. He has denied any wrongdoing but re-fuses to identify the donor of the money from the Mid-dle East. He has fired his deputy and other critics in his government, sacked the attorney-general probing him, suspended two newspapers and blocked a British-based web site. AP

Unused 700-mHz band stunting digital dividend

10 percent of the registered voters and approved by a majority of qualified votes cast in a plebi-scite, and the deletion of the provisions giving the Bangsamoro its own police and military forces.

Slim chance for FOI Belmonte, meanwhile, admitted that the

chance of the Freedom of Information (FoI) Act to become a law in the 16th Congress is now slim due to lack of time. “everything is slim; there are only few days left [before Congress break], there are also few days before the campaign period for senators.” Based on the legis lat ive ca lendar, Congress will adjourn on December 19 and resume on January 19. the third and last

regular session of the 16th Congress is expected to be cut short because of the 2016 national and local elections in may. the FoI bill, which already passed the Senate and is currently undergoing plenary delibera-tions at the House, is pushing for greater access to public or government documents. the measure has not been called on the floor because of lack of quorum.

BusinessMirror [email protected] Friday, December 11, 2015 A2

NewsPAL... Continued from A1

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So PAl, for instance, will be returning its service to Saipan in the northern marianas, despite its small market of some 19,000 Filipi-nos, who comprise 35 percent of the US Com-monwealth’s population. the twice-weekly flights, which will start in mid-2016, will be served using a 156-seater A320. the route will be operated by PAl’s low-cost affiliate, PAl express, and will be the first international destination of said carrier. PAl used to fly to Saipan in the 1990s, which continues to attract nurses and other medical pro-fessionals. there is also a sizable number of medical referrals among the local Chamorro population, who come to manila for its hospital services. PAl also flies five times a week to Guam, which hosts a significant number of overseas Filipinos, as well as second- and third-genera-tion Guamanians of Filipino descent, now US citizens. As of 2006 there were some 47,000 Filipinos—naturalized US citizens and perma-nent residents—and about 1,400 temporary workers on Guam, a US territory. on December 18 PAl will also be offer-ing thrice-weekly flights to Port moresby, Papua new Guinea, using an A320. Papua new Guinea hosts about 20,000 Filipinos who work in various hospitality jobs, the agriculture and fisheries sectors, and various professional and managerial positions. Bautista also confirmed flights to Paris, France, “in two years; we will wait for the Boe-ing triple 7.” He said, by then, the carrier would already have another Boeing 777-300eR (370 seats), which it plans to use for many of its long-haul flights. there are some 100,000 Filipinos who live and work in France. (See, “PAL to fly to the City of Light,” in the BusinessMirror, De-cember 4, 2015.) the airline currently uses B777s for its just-launched manila-new York route, as well as for San Francisco, los Angeles, Vancouver, toronto, and other select regional and international routes. two more additional B777-300eRs units are expected to arrive in october and December 2016. Although the carrier ’s mainland US

destinations are mostly patronized by Filipinos, Bautista stressed that “we’re also trying to cap-ture the mainstream [American] market.” PAl’s routes in north America account for most of the carrier’s profits from its international operations. meanwhile, PnB said its PnB-PAl mabuhay miles masterCard “remains among the country’s most prestigious and highly rewarding cards, offering a low point-to-mile conversion.” new cardholders will receive 2,000 PAl mabuhay miles upon activation of their cards, and an additional 10,000 miles upon spending a minimum of P100,000 at PAl within the first year. Cardholders can also now enjoy VIP treat-ment with priority check-in at PAl check-in counters by simply presenting their credit card upon check-in. In a launch event on Wednesday in a makati City hotel, PnB introduced new credit-card de-signs and enhanced card-security features. “the new PnB masterCard credit cards now come with the superior emV/Chip technology, providing increased security and protection against card fraud,” said Annie lim, PnB senior vice president and head of the bank’s credit-card business. the new cards also come with contactless technology, allowing cardholders to pay for their purchases without having to swipe or dip their card. the card is simply tapped on a con-tactless terminal, making payments faster and more convenient. lim said: “Giving our cards a fresh look and enhanced features is part of our way of expressing thanks to our valued customers, and to show our commitment to continu-ously provide the best customer experience to generations of Filipinos.” For his part, masterCard Country manager Poch Villa-Real said: “We salute PnB Credit Cards’ constant efforts in enhancing their credit cards and elevating the level of service they provide customers.” PnB masterCard credit cards can be used in over 40 million merchants locations, automated teller machines and online in more than 210 countries.

quality of employment generated dur-ing the period. This is crucial since the country has been plagued by poor-quality jobs, as evidenced by high underemployment.  PSA data showed that underemploy-ment   nationwide was at 17.7 percent, in-cluding data from Leyte. Underemployment, excluding data from Leyte, was at 17.6 percent, which was still an improvement from the 18.7 percent posted in October 2014. “It is important to know who were em-ployed and in which sectors. In other words, the quality of the decline must be studied,” Terosa said. “I believe that employment will be stronger in the fourth quarter and early next year because of the elections.”   In order to continue the reduction in the number of the unemployed and improvement in underemployment, Ateneo de Manila Uni-versity School of Social Sciences Dean Fernando Aldaba said maintaining the health of the busi-ness environment and introducing reforms, such as those on income tax, are needed. 

Aldaba said improving infrastructure, government spending and keeping prices stable are also necessary in boosting employ-ment growth. Economic Planning Secretary Arsenio M. Balisacan, for his part, said the government must sustain its public invest-ments in education and training to improve labor productivity.  Balisacan added that efforts to improve employment generation in the agriculture sector are key to giving thousands of unem-ployed in this sector decent jobs. He also stressed the importance of proper implementation of the Roadmap for Address-ing the Impact of El Niño to prepare affected workers in the sector.   “We need to sustain public investments in education and training to improve labor productivity and capacities. At the same time, we need to sustain the momentum of fiscal spending, particularly in infrastructure development, to boost economic growth and employment in agriculture and industry sectors,” Balisacan said. Preliminary results of the Labor Force Survey

(LFS) in October showed that the employment rate improved to 94.4 percent, including data from Leyte.  Excluding Leyte, the employment rate increased to 94.3 percent in October 2015, from 94 percent in October 2014.  Workers in the services sector comprised the largest proportion of the population who are employed. These workers made up 54.5 percent of the total employed in October.  Among them, those engaged in wholesale and retail trade or in the repair of motor vehicles and motorcycles accounted for the largest percentage (35 percent) of workers in services sector. Workers in the agriculture sec-tor comprised the second-largest group mak-ing up 29.6 percent of the total employed in October, while workers in the industry sector compose the smallest group registering 15.9 percent of the total employed.   The October LFS results also showed that in the industry sector, workers in the manu-facturing subsector made up the largest group, accounting for 50.7 percent of workers in this sector; and those in construction, the second- largest group, represent 43.7 percent.

Economists: Bolder policies needed to boost jobs growth

House to ratify budget bill, move BBl before break

[email protected] Editor: Dionisio L. Pelayo • Friday, December 11, 2015 A3BusinessMirrorThe Nation

In an open letter, the Philippine Mise-reor Partnership Inc. (PMPI) called on representatives of the Government of the Republic of the Philippines (GRP) and the NDFP to return to the negotiating table “and resume the talks until a just political settlement is reached.”

“We see that the best timing to pub-licly call for the resumption of the peace talks is today, in time for the Interna-tional Human Rights Day, as the human rights not just of combatants from both sides, but also of civilians whose rights are severely violated and abused because of this conflict,” PMPI National Coordi-nator Yolanda Esguerra was quoted in a statement as saying.

The talks between the government and the rebels have been stalled for

years due to several issues, including what the NDFP said was the continued arrest and detention by the govern-ment of its consultants in the negotia-tions despite their immunity.

The military, on the other hand, claimed these consultants were arrested due to the existence of criminal charges filed against them in court where war-rants of arrest have been issued.

The government also claimed that the NDFP has failed to identify all of its consultants in the negotiations, except with their aliases, and only do so once they have been arrested by se-curity forces who are serving warrants for their arrest.

Esguerra said PMPI’s open letter to both sides was a result of the peace sum-

mit that was held last month.“While acknowledging that conflict

is part of a society’s dynamic, [we] reit-erate the urgency to take actions that would prevent the conflict from becom-ing more violent and further wantonly affecting thousands of innocent civil-ians,” the letter partly reads.

“The participants call on both par-ties to pursue the path of negotiation, to communicate openly and heed and regard principled compromises instead of resorting to violent confrontations and heightened offensives,” it added.

Through the letter, the groups also called for a cease-fire in time for the Christmas season.

“In our perspective, this may be the best starting confidence-building mea-sure for the two camps. They can also consider it as a gift to the affected com-munities as a cease-fire is a sure respite from the conflict, and a chance to address human-rights violations and abuses,” Esguerra said. On Wednesday the Armed Forces of the Philippines Spokesman Col. Res-tituto Padilla said the military is still working on the mechanics of a possible suspension of offensive military opera-tions with the rebels. Rene Acosta

PRESIDENT Aquino took a swipe anew at Sen.Ferdinand R. Marcos Jr., expressing dismay over the latter’s bid to occupy the second highest of-

fice in the land when the son of the late dictator failed to show “repentance” over his family’s record of abuse during the martial law years.

Without naming names, but clearly alluding to the namesake of the late dictator, Mr. Aquino said: “There is this candidate who...”

Marcos, a candidate for vice president, has en-joyed very high survey ratings in the race for 2016. Some pundits have attributed this to the vaunted force of the so-called Solid North Ilocano voting bloc, as well as the continuing support from admir-ers of his late father and mother Imelda.

Imelda, a Guinness Book of Records holder for the most number of pair of shoes, is considered backed by the Eastern Visayas’s formidable Ro-mualdez political clan.

In his speech at Wednesday’s anniversary of a newspaper, President Aquino began his attack on Marcos by lamenting what he described as the ap-parent “attraction to innocent, young citizens of the revisionist version of the martial law years” being peddled.

It is the second time in two weeks that Mr. Aqui-no—whose martyred father Sen. Benigno Aquino Jr. was top rival of the late President Ferdinand Marcos Sr.—attacked Marcos for failure to show remorse for the dictatorship’s record.

At the launch of the book Aquino Legacy marking his father’s birthday on November 27, Mr. Aquino suggested it would do Marcos some good to read the book “so he finally understands what he and his fam-ily should be sorry for.” Butch Fernandez

German Catholic funder calls on peacetalks resume between GRP, communistsTHE local affiliate of Aachen,

Germany-based Episcopal Relief Misereor e.V. has called on the

Aquino administration and the National Democratic Front of the Philippines (NDFP) to resume peace talks.

Aquino swipes at latedictator’s son anew

US donates 77 APCs to PHLunder ‘excess defense’ deal

THE United States transferred on Wednesday 77 units of M113A2 ar-mored personnel carriers (APCs) to the

government, further beefing up the mobility and firepower of the military, particularly the Army.

“For one, the Army will now be able to complete its requirement in the mechanized division. Movement will be expedited [and] accuracy in operation when it’s mobilized will be fast tracked,” Military Spokesman Col. Res-tituto Padilla said on Thursday.

Padilla added that the APCs would also help ensure the “survivability of troops “in the field, especially in buildup areas.”

The APCs arrived at Subic Bay on Wednes-day evening, less than three weeks after US President Barack Obama promised to help modernize the Armed Forces, while he was in Manila attending the Asia-Pacific Economic Cooperation summit in mid-November.

The US Embassy said the armored vehicles comprised the first shipment of 114 units of M113A2 that the US would give to the mili-tary under its existing Excess Defense Article Program. Rene Acosta

Now in the Philippines

Be a Part of it!Out in January Free to BusinessMirror subscribers

briefsinteragency efforts

vs el niño set in motioncommunication Secretary Herminio B. coloma Jr. bared interagency efforts to combat El niño’s impact, following a Special cabinet meeting called by President aquino at the Palace on thursday to assess and get updates on the actual status of the weather anomaly.

Briefing Palace reporters after the cabinet meeting, coloma confirmed that “preparations are in place to deal with the worst possible El niño scenario.”

He said the President and cabinet officials present were informed that the full effect of the current El niño will be “felt in February and march 2016,” when the entire country is projected to get only 20 percent to 30 percent of normal rainfall.

“according to DoSt-Pagasa, the projected worst-case scenario may potentially exceed the most severe El niño conditions experienced in 1997 and 1998,” coloma added.

the Palace official said President aquino had directed the cabinet to exert concerted efforts to mitigate the impact of El niño and to prioritize efferts at ensuring: adequate supply of food and potable water; stable power supply; minimized health risks to citizens; and, fire prevention due to increased humidity.

coloma added that the Department of agriculture was, likewise, directed to increase the buffer stock of rice through importation and provide necessary support and assistance to farmers, fisherfolk, forest workers, and other vulnerable sectors through the distribution of planting materials, cash-for-work program, and the building of Farm-to-market Roads, Small Water impounding Projects and other rural infrastructure. Butch Fernandez

factory output down in octoberaFtER three months of posting increases, the output of the manufacturing sector slid in october due to the anemic performance of petroleum, beverage, food and wood product sectors, according to the Philippine Statistics authority (PSa). Based on the preliminary results of the monthly integrated Survey of Selected industries, the PSa said the Volume of Production index (VoPi) contracted 1.8 percent in october. the Value of Production index for total manufacturing contracted 9.2 percent in october 2015, from a growth of 8 percent in the same period last year. in July, august and September, the VoPi had increasing growth of 0.2 percent, 2 percent and 2.3 percent. the VoPi in october 2014 posted a growth of 8.7 percent. the VoPi of fuel fell 20.3 percent, while beverage posted a decline of 19.7 percent. the food VoPi contracted 15.7 percent and wood and wood products, 14 percent. “about 56.7 percent of the establishments operated at 70 percent to 89-percent capacity, while 18.6 percent of the establishments operated below 70-percent capacity," the PSa said. Cai Ordinario

The DOF had long sought for transparency in the granting of fiscal incentives by the country’s var ious investment-promotion agencies (IPAs), something the DTI fears would potentially erode the competitiveness of the Phil-ippines as an investment destina-tion further.

With this, officials said the imple-menting rules and regulations (IRR) of the law will now serve as the next battlefront for the two agencies, as specific details on IPAs’ compliance to the reporting mechanism will have to be threshed out first before the IRR’s issuance. But for Sen. Juan Edgardo M.

By Catherine N. Pillas

While the President’s signing of the Tax incentives Management

and Transparency Act (Timta) can be considered a victory for the Department of Finance (DOF), the “war” is still not over, as far as the Department of Trade and industry (DTi) is concerned.

[email protected] Friday, December 11, 2015 A5BusinessMirrorEconomy

ThREE of the country’s big-gest mines that voluntarily submitted their operations to

third-party scrutiny by an environ-mental non-governmental organiza-tion posted near-perfect scores in a special “green” scorecard, Philippine Business for Environmental Stew-ardship (PBEST) said. The Padcal mine of Philex in Ben-guet; the mine of Taganito Mining Corp., a Nickel Asia Corp. subsid-iary in Surigao del Norte; and the mine of Carmen Copper Corp., Atlas Consolidated Mining and Develop-ment Corp.’s subsidiary, in Cebu, all scored above 200 out of a possible 210 points based on a PBEST’s En-vironmental Performance Tracking Program (EPTP). “Last year we gave businesses a venue where an independent evalu-ator can assess their compliance with relevant environmental rules and regulations, and we’re glad that these companies answered our call,” said lawyer Ysan Castillo, PBEST secretary-general. Big businesses should take a lead role in environmental stewardship, a field where industries’ resources and culture of innovation can be useful, he added. Developed by renowned geolo-gist CP David, the EPTP was based on the Mining Act of 1995 and its implementing rules and regulations. The instrument is not intended to compare companies and mining operations because inherent dif-ferences exist among each mine, PBEST clarified. Instead, the site and its opera-tions are evaluated based on their

unique environmental situations; and their best practices and inno-vations would serve as models for responsible mining. The first batch of EPTP subjects, three of the longest and most suc-cessful mining operations in the country, showed “ample evidence” of reforestation and rehabilitation efforts and development of the sur-rounding communities in areas like health, education and livelihood. Other specific findings include Carmen Copper mine reporting “no incident of effluent quality violation and employing the most number of Pollution Control officers;” the Pad-cal mine having the highest ratio of employees engaged in environmen-tal-related projects at 3 percent; and Taganito’s mine having the largest contingent liability and mine reha-bilitation fund at P7.3 million. Philex also has an ISO 14001 ac-creditation, the only one of the three mining companies, the report noted. PBEST also announced that the country’s first and oldest mining company, Benguet Corp., has also volunteered to join the EPTP project and has started the first phase of the scorecard’s evaluation process, the results of which will be announced at a later date. Castillo said it is very encourag-ing that four of the biggest legiti-mate large-scale mining companies have joined the EPTP as another platform for the mining industry to come clean and show to the public that “responsible mining is being done.” “This as an important step towards self-regulation in the ex-tractive industries.”

Miners get high marks in ‘green’ scorecard

e.u. businessmen worried over kidnappings Ambassador Franz Jessen of the European Union (EU) delegation answers questions from reporters during a news conference at the financial district of Makati City, south of Manila, on Wednesday. Jessen says recent kidnappings of foreigners, including a Norwegian and Italian by suspected militants, have caused concern among European businessmen thinking of investing in the Philippines. AP

Timta IRR new battlefront for DTI, DOFAngara, the proponent of the tax legislation in the Senate, Timta will improve the investment climate in the country.“The law focuses on promoting transparency and ac-countability, which will, in turn, encourage investors to bring more businesses to our country, provide more employment opportunities and boost our economic growth.” Under Republic Act 10708, reg-istered business entities must file in their IPAs a complete annual tax-incentives report, which will then be submitted to the Bureau of Internal Revenue, the Bureau of Customs and the DOF. For monitoring and analysis of tax incentives granted, the DOF shall maintain a single database and submit to the Department of Budget and Management (DBM) the actual amount, estimate claims, current year’s programmed amount and the following year’s projected amount of tax incentives. For transparenc y pur poses,

these data and information will be ref lected by the DBM in the an-nual Budget of Expenditures and Sources of Financing, which shall be known as the Tax Incentives Information section. Meanwhile, the National Eco-nomic and Development Author-ity is mandated to conduct cost-benefit analysis on the investment incentives to determine the impact of these perks on the economy. The senator stressed that the transparency measure will not ham-per the grant of incentives to regis-tered businesses of the Board of In-vestments, the Philippine Economic Zone Authority (Peza) and other IPAs affected by the legislation. The DOF has been pressing for the passage of the law since 2013, with Internal Revenue Commis-sioner Kim Jacinto-henares declar-ing that there is no real accounting of the amount lost by the govern-ment in the grant of fiscal perks of IPAs to registered businesses.

Most of the country’s IPAs are at-tached agencies of the DTI. “No one really knows how much we are losing. If you ask the IPAs, they all want to give incentives, but then they have no records, no one can give you an answer of revenues foregone. Any revenue-generating measure, we support, any revenue eroding we ob-ject to because we’re still in deficit,” henares said in a previous forum. According to an initial tax ex-penditure report released by the DOF last year, the revenues fore-gone through tax breaks must have at least amounted to P144 billion, or 1.5 percent of GDP in 2011. Of this, P116 billion was said to have come from the grant of incen-tives by the Peza. The Peza, in a previous story by the BusinessMirror, however, countered these figures, and insisted that the amount paid by registered export enterprises in taxes exceeds the amount enjoyed in fiscal perks such as the income-tax holiday.

barangay workers’ retirement benefits ok’dtHE Senate on Wednesday approved on second reading Senate Bill 12 seeking to grant barangay officials and workers retirement benefits. the measure provides a retirement pay of P100,000 for each qualified barangay chairman, P80,000 for each member of the Sangguniang Barangay, and P50,000 each for the barangay treasurer, secretary, barangay tanod, member of the lupon ng tagapamayapa, barangay health- and day-care workers. “their dedication and contribution to public service without monthly salaries but with only honoraria, allowances or other emoluments deserves more than mere recognition,” Sen. Ferdinand R. marcos Jr. said. “i am confident the Senate can approve this measure within the remaining days of our session.” Recto Mercene

Friday, December 11, 2015 • Editor: Angel R. Calso

OpinionBusinessMirrorA6

How to win the electioneditorial

WE have done an extensive review, includ-ing the specific methodologies used, of the various opinion polls regarding voters’ pref-erences for the next president. We can say

conclusively that, at this point, the biggest winner is...the opinion polling companies.

The reality is that reactions to the polls are the same as to referees after a tight basketball game. The winning team applauds the refs for their competent and unbiased decisions. The losing team complains that they were robbed by unfair and unqualified officiating.

Candidates and their advisors know the genuine purpose of the polls. It helps them identify the voter groups that are their solid base, those groups that are equally solid against them, and the middle group that might be swayed into their camp.

The deeper and more important question is, what influences a voter’s decision?

The latest Social Weather Stations preference survey is being severely criticized for the way the questions were framed. However, buried at the end is the most important information. Respondents were asked about the positive or negative effect on their voting decision based on an endorsement by a particular person or institution.

The headlines read, “Filipinos likely to vote against P-Noy’s bet” be-cause the President’s endorsement received a negative 6 rating. In con-trast a local mayor’s endorsement received a positive 15 rating. This was basically true across all economic groups and throughout the country.

This has nothing to do with President Aquino.Several studies have shown that the No. 1 factor influencing a voter

is identification with the candidate. Does the candidate relate to the everyday and local concerns of the voter? An individual voter’s imme-diate worry is not what happens in the West Philippine Sea. It is, for example, the possibly unrepaired national road into Bacolod City or the understaffed national tax office in Cagayan de Oro.

Therefore, they believe that a local mayor, not the president of the Philippines, is most aware of their interests. It follows then that an en-dorsement from someone not aware of their own personal problems may be for a candidate that is also ignorant of what is important in their day-to-day lives.

A politician’s success is directly tied to that person’s ability to under-stand and influence the issues of their constituents at the local level. The farther the “endorser” is away from the voter, the less important and influential the endorsement becomes.

Former US Speaker of the House Thomas P. O’Neill said: “All poli-tics is local.” A national candidate does not win or lose based on what is said in social media or the headlines of Metro Manila newspapers. It is the local mayor, parish priest, or barangay captain who the voters listen to most often.

HAvE you noticed how quickly it gets dark now? Christmas is literally two weeks away, lurking just around the corner, you might say. For some strange reason, however,

I haven’t seen many Christmas lists. To be fair, that’s probably because I only read certain parts of the newspaper. Or maybe because this year, politics has all but eclipsed everything that has nothing to do with citizenship, indecision and someone’s unfortunate talent for being accused of everything going wrong with everyone else’s campaign.

It’s Christmas time, isn’t it?

But Christmas it is and, this time of the year is traditionally seen as the sea-son for generosity, love and good will toward everyone—except, apparently, toward those who support a different candidate, and that’s very unfortunate.

So, with defiant good cheer and the determination not to let politics ruin what’s left of this year, allow me to be the first to share at least a part of my Christmas list of wishes, with all of you.

First, may you reconnect with old friends and make the time to enjoy their company. This is a far better thing to do with friends than arguing about why this person or that person should not be al-lowed to run for office. Instead, try focus-ing on why your chosen ones are the best choices for everyone to make. We can all

shout ourselves hoarse, but arguing over things that are, realistically speaking, out of our hands, will only lead to anger. And as a wise puppet once said, anger leads to hate, hate leads to suffering. I think we can all agree that there is enough suffering in the world that we do not need to add to it. Especially not at Christmas time.

Second, speaking of candidates, may they not make Christmas versions of their “infomercials.” It’s bad enough that we have to see so many of those things way before the campaign period, we shouldn’t have to imagine them coming out from behind our Christmas trees, in the middle of the night.

Third, may we all come to our senses and remember that there are only 14 days to go ’til Christmas. And just like with

voter registration, the closer we get to the deadline, the more difficult it is for everyone to get what they want and to do what needs to be done.

If, against all common sense, you’ve procrastinated this long, may you be nice to the sales staff and the overworked people at the gift-wrapping counters. They’re working overtime for you, you ungrateful slacker! They have families too! They want to get home, put on com-fortable slippers, and chill with their loved ones, just like you do, but they can’t, because you chose to wait until the very last minute to do something that you very well knew you had to do at some point!

Ehem. Moving on.Fifth, may you rediscover all the old

Christmas carols you used to love singing when you were younger. Even the ones by Barry Manilow. Sing along with the kids on the street who accost you with “jingambells” and ask yourself why there seems to be an ever growing number of street children and homeless and the desperately destitute in a country where everything is more fun in.

And while you’re at it, ask yourself if the people you’ve chosen to vote for have done anything significant for the least of their brothers and sisters. No, I don’t mean for you to calculate the dole-outs and the handouts—I mean look for examples of when what was given was a hand-up. Better yet, ask what is being proposed to improve the plight of the least privileged in a sustainable and meaningful way.

Even though we are always reminded

to celebrate the coming of the King of Kings, keep in mind that we don’t have to live under royals unless by choice, or unless we create them ourselves by treat-ing them like monarchs.

Hmmm. Something tells me this list isn’t

turning out the way I planned. Appar-ently, the Christmas spirit has its work cut out for it this year, with the elections being so close. Which reminds me of what Winston Churchill said on Christ-mas Eve, 1941 (seeing as how the 74th anniversary of Pearl Harbor was in this past week as well, this might not be too much out of place):

“Let the children have their night of fun and laughter.  Let the gifts of Fa-ther Christmas delight their play.  Let us grown-ups share to the full in their un-stinted pleasures before we turn again to the stern task and the formidable years that lie before us, resolved that, by our sacrifice and daring, these same children shall not be robbed of their inheritance or denied their right to live in a free and decent world.”

So let’s try not to be grinches this coming Christmas, alright?

And, in that spirit, I leave you with one more Christmas wish: May Santa’s reindeer be in the best of health, lest they call in sick and Santa has to take the train to deliver your presents!

James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

spoxJames Jimenez

Friday, December 11, 2015

[email protected]

annotationstito Genova Valiente

It is easy when you turn 50: you say, you have turned golden. But when one turns 60, how does one call oneself. You cannot equate aging with anniversaries and claim you are turning

diamond. Despite its sparkle, diamond just does not have the nobility of transformation as gold. Diamonds are static stones.

Turning 60Europe has plenty of its own Donald Trumps

Considered one of the noble met-als not because of pedigree, but be-cause of its strong resistance to cor-rosion, gold is quite a reassuring ele-ment when one officially grows old.

When I reached 30 years of age, I became prey to that ugly joke about how one’s age is not anymore in the calendar. the humor behind that expression is very parochial and naïve but it hits the core of your being. thirty means you are not anymore in your 20s, an age which is quite sexy and seductive for a man. the real young man, one discovers, is in his 20s. Freed from the pathology of youth, we uncriti-cally ascribe to teenage youth, the man at 28 or 29 years of age is a rare alloy of brisk body and mind unfettered by the angst, however make-believe, of somebody who has become a 30-year-old being.

Double the 30 and you have the 60, an age that has the boredom of waiting. You start to wait for some-thing undefinable, again not because this anticipated “whateverness” can-not be explained but because they are better, for the moment, left un-explained.

At 60, one waits for disease and death. this is the age where one realizes one moves forward in age. If there is one certainty in this age, it is that one does not turn back. Only in metaphors does any kind of return takes place.

there is one caveat in the relent-less march to the opposite of infin-ity. At 60, one has a multiple cache of memories. If there is a surplus of anything in a person’s life, these are the memories that become fresher each day. the theory of short-term memory loss achieves practical real-ity, for one remembers wars in one’s childhood, the battles fought dur-ing high school and the agonies of crusades in the university. the life one had in the offices where one’s professional achievement could be measured is blurred by what occurred in the interstices of social living.

the wonder of it all is that 60 years of living do not translate to a full 60 years of pains and joys, highs and lows.

Would my life had worked well if I stayed in a foreign country? Would happiness had come easily if I worked in a developmental non-governmen-tal agency?

No regrets.At 60, one has no regrets, should

have no regrets.Everything looks swell when one

is significantly old. the discounts come easily and one uses them to purchase medicines. then there are the special discounts for basic commodities, like rice, sugar, milk, coffee. If in one’s 40’s and 50’s, the taste had already been cultivated and the choices were sophisticat-ed, the lifestyle for the age of 60

are pared down to the basic. Life, one learns, can be just the basic. If one’s life is a design, then we pare down and trim all the sentiments. No cloying emotions except the ba-sic capacity to be angry every now and then, and to have fun, which becomes rarer and, when experi-enced, doubly satisfying.

I turn 60 and I am able to marvel at the things around me. My feet ache more regularly, as if the body is a constant reminder of its mortality. the feeling is not existential but es-sential, furtive and yet not fleeting. the horizon becomes, more or less, permanent the better to savor the aging that seems to run on a faster time signal.

I turn 60 and look around and re-alize that I am not the older one. In fact, I marvel at the lack of wrinkles on my face. I believe we are weaned on the stereotype of weak old men, with quivering voices. the days are

like quotable quotes because I feel I am reviewing life and its passing.

Wills and testaments are part of the age I find myself now. I am re-questing a party and music specified for the last rituals. I pray they will play Mahalia Jackson’s “the Green Leaves of Summer” when the bells toll finally for me. then Billie Holi-day should be there with her “Please Don’t talk About Me When I’m Gone” when I have become mere, romanti-cized ashes. If they are not expensive, tango dancers should grace the req-uisite three days of farewell.

At 60, I look around and discover that technically I am not the closest to departure. At 60, my mother is glorious at 89, hitting 90 this com-ing March.

At 60, I will write poetry, because life is a wonderful, lovely, bitter and sweet verse.

E-mail: [email protected]

By Marc Champion | Bloomberg View

EurOPE has been shocked and outraged by Donald trump’s call to exclude Muslims from migration to the uS. A petition to have him banned from the uK gained 200,000

signatures, more than enough to force Britain’s parliament to consider a debate on the issue. Yet, what trump had to say should feel outrageously familiar.

Populist bigotry about Muslims has already mainstreamed in Europe. Europeans haven’t been outraged enough about that.

take Marine Le Pen, whose Na-tional Front just won 28 percent of the vote—more than either of the main parties—in the first round of elections to run France’s regional governments. Arguably she now has a better shot at becoming president in France than trump has in the uS. She has talked of Muslim immigra-tion as an occupation, comparing it to the German occupation of France in World War II.

It is an occupation of sections of the territory, of districts in which re-ligious laws apply. It’s an occupation. there are of course no tanks, there are no soldiers, but it is nevertheless an occupation and it weighs heavily on local residents.

there are no districts ruled by sharia law in France, a country where hijabs are banned from schools. trump’s claim that there are police no-go zones in Muslim-populated parts of Paris and London is also a fantasy.

Le Pen has been way ahead of trump, calling in a National Front statement last month not just to stop Muslim immigration, but all im-migration. Like trump, she thought this necessary to squelch the threat of terrorists hiding among Muslim refugees. unlike trump, her iso-lationism extends to humanitar-ian foreign assistance—she  wants France to stop sending aid to combat malaria in Africa.

I don’t see why I would pay for mos-quito nets in Senegal.

How about Hungarian President Viktor Orban. He keeps tacking right to outflank the neo-fascist party, Jobbik. He has already built the wall (well, razor-wire fence) that trump wants along the border with Mexico on Hungary’s southern bor-der. Here’s what he has had to say on immigration:

We do not want to see among us significant minorities that possess different cultural characteristics and background than us. We would like to preserve Hungary as Hungary.

And:The borders of Europe must be closed.And:Of course it’s not accepted, but the

factual point is that all the terrorists are basically migrants.

three percent of Hungary’s pop-ulation are immigrants, one of the lowest proportions in Europe.

In Poland (2-percent immigrants), Jaroslaw Kaczynski, the former

prime minister and still dominant figure in the newly elected Law and Justice party, recently issued  this warning  about refugees arriving in Europe:

There are already signs of emergence of diseases that are highly dangerous and have not been seen in Europe for a long time: cholera on the Greek islands, dysentery in Vienna. There is also talk about other, even more severe diseases.

this again is mythology. the red Cross has indeed warned of the pos-sibility that disease might take hold at refugee camps on Greek islands, but because of the squalid condi-tions in which they are forced to live, not because they brought dis-ease to Europe.

Even such mainstream  leaders as the uK’s Prime Minister David Cameron have fallen into the trap. Cameron talked about “swarms” of migrants trying to flood Britain from Calais (there were 3,000 to 4,000), as he tried to outflank the nativist uK Independence Party.

What is needed on both conti-nents is for politicians to be relent-lessly clear about where caution and realism end, and bigotry begins. Le Pen has exploited a gray area, clean-ing up her party’s once openly anti-Semitic and neo-fascist language to make it Islamophobic and anti-im-migrant instead. that is a genuine challenge for the traditional parties, because populism can galvanize a significant chunk of the population in today’s isolationist, post-financial crisis world. But trying to outflank the extreme right is futile unless you become them, as former French President Nicolas Sarkozy—who recently called for schools to stop offering halal meals to Muslim stu-dents—is finding out.

trump’s language should outrage everybody, everywhere. But there is no point banning him from the shores of Europe; Europe has already been trumped.

What is needed on both continents is for politicians to be relentlessly clear about where caution and realism end, and bigotry begins. Le Pen has exploited a gray area, cleaning up her party’s once openly anti-Semitic and neo-fascist lan-guage to make it Islamophobic and anti-immigrant instead. That is a genuine challenge for the tradi-tional parties, because populism can galvanize a significant chunk of the population in today’s isolation-ist, post-financial crisis world.

By Michael Schuman | Bloomberg View

ECONOMIStS, investors and central bankers around the globe breathlessly awaited last Friday’s uS jobs numbers, knowing the figures will likely determine when and by how much the

Federal reserve decides to raise interest rates. the world’s second-largest economy can only dream of such excitement.

China needs layoffs, not just jobs

Officially, the  unemployment rate  in China’s cities has hovered around 4 percent for years. Even the slowest growth in a quarter century hasn’t disrupted this remarkable tranquility. Supposedly, more than 10 million jobs were created in the first three quarters of 2015, top-ping the government’s target for the whole year.

A burgeoning services sector accounts for at least part of the healthy job growth. China’s statis-tics may also be  understating  the level of joblessness, just as they likely overstate growth. But the truth is, China would be better off with even  higher unemployment.

that may sound ridiculous. In a January report, HSBC economists figured that China must create 14 million new, urban jobs each year to keep the labor market stable. At the same time, one of the biggest problems facing the Chinese econ-omy right now is massive excess ca-pacity in steel, cement, metals and other industries built up during the country’s go-go years. Now that in-vestment has tapered off, more and more of those mills and factories are effectively redundant.

Suspiciously low unemployment numbers reflect the fact that facto-ries aren’t closing or downsizing—and, thus, laying off workers—fast

enough. Laura Zhai, a director at rat-ing agency Fitch in Hong Kong, esti-mates that China needs to eliminate at least twice as much steel capacity as is currently planned for the sector to recover. Factories may be losing as much as $50 per ton of steel, accord-ing to one recent estimate.

the damage goes well beyond the financial health of individual companies. A July study of China’s labor market by the International Monetary Fund (IMF) argued that by keeping too many workers on the payroll, state-owned enterprises [SOEs] are holding back overall eco-nomic progress. “though this labor hoarding by SOEs may mitigate nega-tive impact on employment as the economy slows, prolonged reliance on it could reduce labor flexibility, leading to its inefficient allocation, limiting productivity gains,” the re-port says. In other words, saving jobs today is hurting growth tomorrow.

the fear of layoffs and potential worker unrest is preventing China

from truly reforming the state sec-tor. In the government’s latest plan to improve SOEs, released in September, some would be encouraged to become more efficient. But others would be “dedicated to public welfare,” accord-ing to Xinhua, the official news agen-cy. the latter “will exist to improve people’s quality of life and provide public goods and services”—essen-tially, to serve as job banks.

the need to maintain employ-ment levels also perpetuates Chi-na’s unhealthy obsession with GDP growth. At a 2014 news conference, Premier Li Keqiang stressed that the country had to keep growing fast enough “to ensure fairly full employment and realize reason-able increase of people’s income.” Over the past year, the central bank has repeatedly cut interest rates and taken other measures to spur credit, despite China’s bur-geoning debt pile. China’s grand plan to rebuild the old Silk road trading routes is essentially a 

boondoggle for construction com-panies, equipment makers and other old-line companies that em-ploy thousands of people.

China’s leaders have embraced layoffs before. Millions lost their jobs in a large-scale overhaul of the state sector launched in the late 1990s. Yet, at that time, the economy was still booming and replacing jobs lost at state factories with new ones in the private sector.

this time, the economy is tran-sitioning away from its dependence on investment for growth, which means many industrial jobs may vanish permanently and leave laid-off factory workers fewer options. the IMF report estimates that streamlining state companies and industries with surplus capacity more quickly could add half to three-quarters of a percentage point onto the near-term unemployment rate. that may look like a small bump, but in gross numbers, it would add up to plenty of unhappy Chinese with

a gripe against their government.Yet, something is going to have to

give. According to government data, profits at major industrial companies declined 2 percent over the first 10 months of the year, compared to the same period in 2014. At state-owned enterprises—which account for much of China’s excess capacity and workers—profits have dropped by 25 percent. to cushion the blow of layoffs, the government needs to move faster to deregulate the service sector to create alternative jobs. re-dundant steel and cement workers will require retraining for lives in those new industries. those too old to switch careers need a strength-ened safety net.

Otherwise, the future for every-one looks grim. the IMF study warns gently that delays in implementing reforms “could cause further distor-tions, which would weaken medium-term employment prospects.” the question isn’t whether China will suf-fer widespread job losses, but when.

Scientists say happiness won’t extend your life after allBy Karen Kaplan | TNS

HAPPY people live longer, a relationship that’s been documented in a variety of

research studies.But a new paper published in the

medical journal Lancet comes to the sad conclusion that happiness isn’t responsible for this observed longevity. Instead, the things that make people happy, particularly their good health, are the same things that shield them from premature death.

“Happiness and related measures of well-being do not appear to have any direct effect on mortality,” the study authors wrote.

to get to the bottom of the relationship between happiness and a long life, researchers led by Dr. Bette Liu, an epidemiologist at the university of New South

Wales in Sydney, examined data on 719,671 people who participated in the Million Women Study. All of the women joined the study from 1996 to 2001.

three years after signing up, researchers asked them how often they felt happy. the 39 percent who answered “most of the time” and the 44 percent who answered “usually” were classified as happy people. the other 17 percent, who said they were “sometimes” or “rarely/never” happy, were deemed unhappy.

At the same time, the women were also asked to rate their health status as “excellent,” “good,” “fair” or “poor.” then researchers kept track of them for nearly 10 years, on average. Dur-ing that time, 31,531 (or 4 percent) of them died.

In their first pass at the numbers that adjusted for age, the research-

ers found that women who said they were unhappy were 29 percent more likely to have died compared with their counterparts who were happy. But the women who were unhappy were also more likely to be in poor health. Once the researchers took that into account, the association between happiness and mortality disappeared. that held up after the team added in variables such as so-cioeconomic status, exercise and sleeping habits; whether they lived with a partner; and whether they were religious.

the 20 percent of women who rated their health as fair or poor at the start of the study were 67 per-cent more likely to die during the study period than the 80 percent of women who rated their health as excellent or good. But in each group, the women who said they

were happy had the same odds of dying as the women who said they were unhappy.

When the researchers focused just on women who died of heart disease or cancer, the results were the same: those who were happy at the start of the study were just as likely to die as their unhappy counterparts.

Finally, the researchers took a slight detour from happiness to see whether women who felt they were “in control, relaxed, or not stressed” had any protection against an early death. Among the women who said their health was excellent or good, these stress-related measures had no bearing on mortality risk, the researchers found.

“Our large prospective study shows no robust evidence that hap-piness itself reduces cardiac, cancer, or overall mortality,” they concluded.

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2ndFront PageBusinessMirror

www.businessmirror.com.phFriday, December 11, 2015

HOUSE TO RATIFYBUDGET BILL, MOVE BBL BEFORE BREAK

PHL unlikely to reversedeclining export receipts

By Jovee Marie N. dela Cruz

The leadership of the house of Representatives on Thurs-day vowed to ratify the 2016

P3.002-trillion national budget and finish the period of interpellation on the Bangsamoro basic law (BBL) before the lower chamber goes on break next week. Speaker Feliciano Belmonte Jr. told reporters that the chamber will be able to muster a quorum for the said measures. “We will ratify the budget next week and immediately transmit it to Presi-dent Aquino for signature.” In the 2016 budget bill, the so-cial-services sector continues to get the largest share of the pie at 36.8 percent of the national budget, or P1.106 trillion. The economic services will get the second-largest share of the bud-get at 27.6 percent, or P829.6 billion, while general public services will re-ceive 17.3 percent, or P517.9 billion. The debt burden, which is composed of interest payments to service outstanding debts, as well as net lending to government corporations, will reach an all-time low of 14 percent of the total bud-get, or P419.3 billion. To boost the government’s capacity to defend national sovereignty, the defense

sector will get a share of 4.3 per-cent, or P129.1 billion. Belmonte said at least 15 law-makers still want to interpellate for the BBL. “For the BBL, at the very least, we will finish the period of interpellation [by next week]. If we can go beyond, that is okay.” “We have to plan very carefully the remaning few days in Januray and February. We should use it advantageously. The fact of the matter is that many people are talking as if the matter on the floor is the original [BBL] draft. In fact, the [BBL ad hoc] committee report contains almost as many 50 amendments from original draft, but many people did not know that,” Belmonte said. earlier, Party-list Reps. Lito Atien-za of Buhay and Neri Colmenares of Bayan Muna said some lawmakers are not attending the session to avoid deliberations on the BBL. Included in the provisions op-posed by lawmakers are the re-naming of the proposed BBL to the Basic Law on the Bangsamoro Autonomous Region, removing opt-in provision, where outside the core territory may opt—in the fifth and 10th year after BBL’s ap-proval into law—to be part of the territory upon petition of at least

Unused 700-MHz band stunting digital dividend

DIOKNO: “My full-year

exports growth forecast for

2015 is negative 6 percent.”

Manila to startPjepa reviewearly next year

SOLAR LAMPS Education Secretary Bro. Armin A. Luistro (center), FSC, receives on behalf of the Department of Education a donation of 2,000 solar lamps from Manila Electric Co. (Meralco) employees, partners and customers during the company’s Christmas lighting ceremony. The donation came from One Meralco Foundation’s “One Child, One Lamp” campaign, launched in November, to raise funds to donate solar lamps to public schools in mountain and island villages without electricity. Also in photo are (from left) Ruben Benosa, Meralco head of Corporate Logistics; Jeffrey Tarayao, president of One Meralco Foundation; Manuel V. Pangilinan, Meralco chairman; and Alfredo S. Panlilio, Meralco SVP and head of Customer Retail Services and Corporate Communication. NONOY LACZA

By Cai U. Ordinario

Weak global demand and the el Niño are among the key factors that will

keep the country’s export earnings low until next year, according to local economists.  Former Budget Secretary Ben-jamin E. Diokno said he expects exports growth to average nega-tive 6 percent this year. He also said export earnings will likely be flat next year.  “My full-year exports growth forecast for 2015 is negative 6 per-cent,” Diokno said. “This dismal outlook will spill over next year, with El Niño continuing until the end of the second quarter, the ris-ing security concern and the luke-warm global market. The govern-ment forecasts a feel-good exports growth of 12 percent. Realistically, I think exports growth is going to be flattish.” University of Asia and the Pacific economist Victor Abola said export earnings will continue to be low and post an average of negative 7 percent this year. 

However, Abola said there may be some recovery in export growth next year, on the back of improve-ments in the growth of China and advanced economies.  Abola added that, with this recovery, the country may post a relatively low export growth of 5 percent to 8 percent next year. This

is far from the double-digit growth that the Philippine export sector has been accustomed to reaching in previous years. “I think we’ll be in negative territory for the last two months of the year. However, I expect a recovery for next year, as the US economy, China, EU [European Union] and Japan growth stabi-lizes, albeit at historically low rates,” Abola said. 

October exportsTHE country’s merchandise exports dropped 10.8 percent in October, ac-cording to data released by the Phil-ippine Statistics Authority (PSA).  The country’s merchandise ex-port earnings reached $4.59 billion in October 2015, lower than the $5.15 billion posted in October 2014.  In the January-to-October pe-riod, exports posted a contraction of 6.2 percent to $48.87 billion. “With a weak and weakening world economy, it is hard to think of a scenario where the country’s year-to-date exports decline [-6.2 percent] will be reversed. Exports have been in the red in nine of the first 10 months of 2015. In May and September, exports plummeted by 17.4 percent and 15.5 percent, re-spectively,” Diokno said. The export of locally manufac-tured goods declined 5.1 percent in

October to $4.06 billion, from $4.28 billion recorded in October 2014. Manufactured goods accounted for 88.5 percent of total export earnings in October 2015.  The PSA also said exports of agro-based products, which accounted for 5.8 percent of the country’s exports, declined 29.8 percent.  Exports of agriculture products amounted to $264.50 million in Oc-tober 2015, lower than the $376.62 million posted in October 2014. Meanwhile, the country’s total export earnings from the country’s top 10 export markets in October 2015 reached $3.829 billion, or 83.4 percent of the total. The country’s top 3 export markets are Japan, the US and Hong Kong, with a share of 22.6 percent, 14.7 percent and 10.8 percent, respectively. Export earnings from Japan reached $1.04 billion in October 2015. It contracted 7.7 percent from $1.123 billion posted in the same month a year ago. Shipment of goods to the US reached $675.35 million in October 2015. It also posted a contraction of 13.1 percent from $777.56 million in the same month last year. Exports to Hong Kong amounted to $497.71 million. This represented a contrac-tion of 4.3 percent from $519.99 million last year.

Continued on A2

The Department of Trade and Indus-try (DTI) is setting the first general review of the country’s only free-

trade agreement (FTA), the Philippines-Japan economic Partnership Agreement (Pjepa), early next year, then press Tokyo for better access for agricultural products. Trade Undersecretary for Industry Development and Trade Policy Adrian S. Cristobal Jr. said that, with the general re-view already delayed by almost two years, the DTI is now hoping to start the process early next year. “We started the process, but not all of the areas of the review are moving at the same pace; so we got de-layed at the trade in goods level. We’re hoping we can continue this early next year,” Cristobal said. The Pjepa entered into force in 2008 and—under the agreement—should be subject to review every five years to check the implementation of the agreement. The review may entail adjusting the tariff impositions of each country. For the Philippines, Manila is looking to adjust the tariff-rate quota on agricul-tural products, specifically bananas, as this has already been maximized in the seven years since the agreement came into force. “Our offensive interest is really in agricultural products. Ang gusto natin is either taasan ’yung quota or tanggalin ’yon. Sana pumayag sila,” a source privy to the discussions said. According to the trade source, the Phil-ippines is willing to offer concessions on industrial products to Japan in exchange for better access of its agricultural goods. Japan’s offensive interests—or the goods it is seeking to gain more access in the Philippine market—include auto, chemicals, iron and steel. Aside from pushing agricultural goods, the Philippines also wants the extension of the framework for the deployment of nurses and caregivers to other profession-als, such as Filipino engineers and teach-ers. According to the source, the Pjepa has mostly been positive for the Philippines, with the trade surplus the country enjoys jumping from $1 billion before 2008 to as much as $7 billion in 2014. Catherine N. Pillas

International Telecommunication Union (ITU) Radiocommunication Bureau, said his group has already finished harmonizing the 700-MHz band and allocating it for Long-Term Evolution use in ITU Region 1, which covers Europe, Africa, the Middle East and Central Asia. The decision was taken during this year’s World Radiocommuni-cation Conference (WRC-15), and follows similar action taken at WRC-07, which saw 700-MHz spec-trum adopted by ITU Regions 2 and 3, which cover the Americas and Asia Pacific. “The global harmonization of the 700-MHz frequency band that has been decided by WRC-15 paves the way for manufacturers and mobile operators to offer mobile broadband at an affordable price in currently underserved areas,” he said. The ITU is the United Nations specialized agency for information and communication technologies, while GSMA is an association of mo-bile operators and related companies devoted to supporting the standard-ization, deployment and promotion of the GSM mobile telephone system. Currently, San Miguel Corp. holds the right to operate the whole band: with Liberty Telecoms Holdings keeping 80 MHz; High Frequency Telecommunications with 10 MHz; and New Century Telecommunica-tions 10 MHz. But the two incumbent telecom-munications companies in the Phil-ippines are seeking the intervention of the National Telecommunications Commission (NTC) for the recall and auction of portions of the asset, as this would help them improve their mobile Internet services. “We have to refarm it to the exist-ing and new potential telcos. I think San Miguel should keep a portion of 700 MHz, Globe and Smart deserve some,” Philippine Long Distance Telephone Co. (PLDT) Chairman Manuel V. Pangilinan said in an in-terview on Thursday. Globe General Legal Counsel

Froilan M. Castelo, on the other hand, said that as early as 2005, Globe al-ready wrote to the regulator request-ing for an allocation and assignment of frequencies within the 700-MHz and 800-MHz bands for its broad-band wireless network, but the NTC did not act favorably on its request. According to Gowran, telcos are gunning for portions of the 700-MHz band as such an asset is highly equitable, given that it can cover a large area using a single cell site. “The lower band has greater cov-erage, but requires lower capital in-vestment,” he said. “It is critical for the operators to roll out affordable

services at the lowest possible cost —that is why the operators are talk-ing about better Internet experience with the 700 MHz,” he explained. Customers complain of slow In-ternet speeds in the Philippines. An Ookla study showed that the coun-try has the second slowest average download speed among 22 countries in Asia. As of May, the country’s average download speed reached 3.64 Mbps, ranking 176th out of 202 nations around the world. It is eight times slower than the global average broad-band download speed of 23.3 Mbps. Cloud services provider Akamai

Technologies also reported that, while the Philippines might have improved its connection by a per-centage point, its overall ranking in Asia still remains at No. 13 out of 15, or the third-worst connection in the region. According to the first-quarter re-port of Akamai, Filipinos enjoyed an average download speed of 2.8 Mbps during the period under review. Trail-ing behind are India and Indonesia with 2.3 Mpbs and 2.2 Mbps average speed, respectively, hence the clamor for a new player that will break the duopoly that lords over the market with over 100 million subscribers.

San Miguel is expected to sign a deal with Telstra Corp. Ltd. soon, as it debuts in Manila in 2016, promis-ing to deliver better Internet services than the incumbents. The Australian giant plans to invest roughly $1 bil-lion in a wireless joint venture with the diversified conglomerate. The Filipino diversified conglom-erate is expected to hold 60 percent of the said company, requiring it to invest as much as $1.5 billion, while the remainder will be held by Telstra. Telstra is known to be one of the first few telcos in the world to have successfully capitalized on the 700-MHz band.

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