BusinessMirror May 28, 2016

PESO EXCHANGE RATES n US 46.7900 n JAPAN 0.4247 n UK 68.7719 n HK 6.0254 n CHINA 7.1322 n SINGAPORE 33.9550 n AUSTRALIA 33.6794 n EU 52.2036 n SAUDI ARABIA 12.4793 Source: BSP (26 May 2016)

MAZDA SKYACTIV-D: BREAKING BARRIERS

S “PPP,” A

ERC okays 31 PSAs submittedby SMC’s power subsidiaries

C A

The number of power-supply agreements submitted by SMC’s power units that were denied by the ERC

7

“HOW old is this kid? Still wearing diapers.”—Donald Trump to a demonstrator, as a protest outside his rally in New Mexico turned violent. AP

“THE nature of the alleged crime and the resulting harm compelled this decision.”—US Attorney General Loretta Lynch, after the Justice Department said it intended to seek the death penalty against Dylann Roof, the man charged with killing nine black parishioners last year in a church in Charleston, South Carolina. AP

“I TOLD him, ‘I can’t even talk, Mr. Cosby.’ I started to panic.”—Andrea Constand to the police, in a decade-old statement revealed during a preliminary hearing as a judge ordered comedian Bill Cosby, 78, to stand trial on sexual-assault charges. AP

A broader look at today’s businessBusinessMirrorBusinessMirrorMEDIA PARTNER OF THE YEAR

2015 ENVIRONMENTAL LEADERSHIP AWARD

UNITED NATIONSMEDIA AWARD 2008

www.businessmirror.com.ph n Friday, May 27, 2016 Vol. 11 No. 230 P. | | 7 DAYS A WEEK

P-Noy urged to ink billamending housing act

INSIDE

C A

EASING OF SOCIALIZEDHOUSING RULES KEY TO ADDRESSING BACKLOG

CAR OF THE MONTH: VOLKSWAGEN TOUAREG SPORT EDITION

ISUZU PHL UP 38% IN SALES

KTM IN THE PHILIPPINES: ‘BEREIT ZUM RENNEN!’

Estimated housing backlog in the country today

6MSPORT EDITION

MOTORING E2

C A

‘PPP ACT SHOULD BE HIGHON NEW ADMIN’S AGENDA’

It’s now or neverfor TPP as Obamasuccessors nix it

ERC okays 31 PSAs submittedby SMC’s power subsidiariesERC okays 31 PSAs submittedby SMC’s power subsidiariesERC okays 31 PSAs submitted

MOTORING E1

MOTORING E2

38% IN SALES

CONSTRUCTION workers gather near a construction crane that collapsed at a construction site on Thursday in the financial district of Makati City. Initial reports said two people were injured when the falling crane snapped electric cables and about four electric poles were broken, including one that fell on a passing taxicab (right).

AP/BULLIT MARQUEZ

PRESIDENT Barack Obama is racing against the clock to cement a massive Paci�c Rim trade deal that all of his potential successors oppose, with

his administration eyeing a looming �ght on Capitol Hill while starting to implement as much of the com-plicated pact as it can.

�e e�ort begins in Vietnam, where Obama spent the last three days touting the merits of the 12-na-tion Trans-Paci�c Partnership (TPP), which would link 40 percent of the global economy, and reassuring Vietnamese leaders key to the deal that Congress will ultimately overcome the thorny politics of trade and ratify the agreement.

“Nothing is easy in Washington these days,” Obama assured participants at a discussion with business leaders on Tuesday in Ho Chi Minh City, the heart of what is one of Asia’s fastest-growing econo-mies. “But, despite sometimes the lack of cooperation with Congress, I seem to be able to get a lot of things done anyway.” Ordinarily, a presidential administration would wait until Congress rati�es a trade agreement before putting it into force with member-nations.

2000 miles

2000 km

JAPAN

NEW ZEALAND

MEXICO

PERU

CHILE

VIETNAM

AUSTRALIA

UNITED STATES

CANADA

PacificOcean

CHINA

RUSSIA

Source: U.S. Trade RepresentativeGraphic: Tribune News Service

MALAYSIA

SINGAPORE BRUNEI

Trans-Pacific PartnershipThe Trans-Pacific Partnership free trade deal was signed Thursday.

Countries in the Trans-Pacific Partnership

STAKEHOLDERS in the public-private partnership (PPP) arena—businessmen and government o�cials alike—are dismayed by the failure of the 16th Congress to pass

the proposed PPP Act, which contains the needed amend-ments to the build-operate-transfer law that will shift the country’s infrastructure development to higher gears.

“We were hoping that the PPP Act will pass the current Congress, because it is an infrastructure bill intended to ad-dress the infrastructure problem that we are currently experi-encing,” PPP Center Executive Director Andre C. Palacios told the BusinessMirror in an interview. 

Sans the passage of the bill, the country might slide into a so-called infrastructure crisis, which will require extraordi-nary e�orts to mitigate. 

“Without the law, the PPP Center and the next govern-ment will need to push harder to develop infrastructure,” Pa-lacios said.  With this, Makati Business Club (MBC) Executive Direc-tor Peter Angelo B. Perfecto, European Chamber of Commerce of the Philippines (ECCP) External Vice President Henry J. Schumacher and Megawide Construction Corp. Corporate In-formation O�cer Louie B. Ferrer are one in their call for the Duterte administration to consider the bill a priority. 

B L L @llectura

THE Energy Regulatory Commission (ERC) has approved 31 power-sup-ply agreements (PSAs)  submitted

by the  power units of conglomerate San Miguel Corp. (SMC).

PSAs are accomplished via bilateral ne-gotiations between a power producer and its o�-taker.    After April 30, the ERC no longer allowed PSAs. Instead, the method by which a distribution utility (DU) or an

electric cooperative can source power from a power producer should be done though a competitive selection process (CSP), a policy meant to discourage negotiated power-supply contracts between a DU and a pow-er producer.

�e CSP is meant to ensure power sup-ply is bought and passed on to consumers at the least possible cost by bidding out the power requirements of the DU instead of entering into a bilateral power-supply

B C N. P @c_pillas29

THE Chamber of Real Estate Builders’ Association (Creba) remains hopeful that the amendatory bill to the Urban Development and Housing Act

of 1992—a critical policy that will enable developers to reduce the country’s huge housing backlog—will still gain the last-minute approval of President Aquino, after hurdling Congress earlier this week. 

Democracy Watch: May polls successful, credible

BusinessMirror www.businessmirror.com.ph Friday, May 27, 2016A2

News

SOUTHWEST MONSOONAFFECTING THE WESTERN

SECTION OF LUZON(MAY 26, 5:00 PM)

“�e world saw more than 44 million Filipinos troop to their respective poll-ing precincts and made their voices heard through a process that has long been a cor-nerstone of our democracy,” Democracy Watch said in a statement.

It lauded the Commission on Elections (Comelec) and all parties responsible for the successful and credible conduct of the May 9 elections.

Democracy Watch is a social initia-tive of advisory and research-consultancy group Stratbase Research Institute promot-ing an inclusive economic prosperity and a truly democratic political system.

It said that, while some quarters have aired various concerns over the automated election system, with allegations that ques-tion the credibility of the elections, it is im-portant to note of actual veri�able facts.

�e number of Filipinos who voted for their next local and national leaders trans-lates to an 81.7-percent turnout, one of the largest in recent memory, it noted. �e same trend was noted for the overseas ab-sentee voting.

Also, the group said the elections saw the largest deployment of vote-counting ma-chines (VCMs) not only in the Philippines and the region but the whole world. Despite

glitches in some machines, these occurrences were statistically negligible and do not detract from the e�ciency of the polls, in general.

It is a further testament to Comelec’s competence that when it was ordered by the Supreme Court to print out voter receipts, it complied satisfactorily and recon�gured al-most 100,000 VCMs in just over a month. As a result, over 40 million vote receipts were printed. To date, no discrepancy between the selections shaded by the voters and the printed receipt has been reported.

�e polls also required the recruitment, hiring and training of more than 45,000 �eld technicians in less than three months, and the printing of 56 million ballots in 49 days, more feats of technical �exibility.

On May 9 Filipinos created one of the largest paper-audit trails in the history of elections, with over 43 million voter-marked ballots and corresponding voter receipts, as well as over 2 million count re-ports, all available for auditing.

Fourth, when the voting was done, the Comelec was able to proclaim an astound-ing 99.96 percent of all 18,000 or so elec-tive positions 10 days after the elections.

By election night, some 86 percent of all votes had been transmitted, a remarkable ac-complishment for an archipelago with a big

diasporic population. Compare this to 59 percent in 2010 and 57 percent in 2013.

“�at more than 20,000 losing candi-dates conceded by election night further attests to a stable belief in the polls’ cred-ibility. Foreign observers and governments were, likewise, impressed. Clearly, faster results mean less instability and inspire greater con�dence in the process,” Democ-racy Watch said.

Finally, the random manual audits completed—715 precincts—went beyond the required one per legislative district.

�e allegations of manipulation hurled by some parties have so far been targeted at a change in the script conducted by Smart-matic Project Manager Marlon Garcia, a correction that, initial investigations have pointed out, is a mere cosmetic change and does not a�ect the results of the elections.

“In light of these charges of fraud, we call on all concerned parties to avail [them-selves] of the PPCRV’s [Parish Pastoral Council for Responsible Voting] open invi-tation to all concerned candidates to send their representatives and scrutinize the ongoing manual audit of electoral returns. Check the solid data �rst before going to the media with baseless theories,” it said.

Democracy Watch said it believes that an election that is hailed as one of the most successful and credible in history should be above senseless politicking.

Given the record transparency of the process, any allegations should be based on veri�able facts, not evident and discernible political spin, it said.

“We also call on Comelec to conduct a speedy investigation of these claims of manipulation so that the true voice of the people will be upheld,” it said.

DEMOCRACY Watch, a citizen-led democratic initiative that envisions a mature and reformed Philippine

republic, has described the conduct of the 2016 national elections as successful and credible.

PPP... A

“It is, indeed, unfortunate that a PPP law was not passed in this Congress despite the fact that it was clearly a priority piece of legislation. As this recommended legisla-tive measure is passed on to the next Con-gress, we are made hopeful by President-elect Rodrigo R. Duterte’s pronouncement that PPP will continue under his watch, but perhaps with faster rollout and delivery,” Perfecto said.  He added: “�is will more likely mean that the passage of a PPP Act shall become part of his administration’s legislative pri-orities and certi�ed as urgent.” Schumacher said the next set of law-makers should see the importance of the bill, which will  hasten the procurements process—from planning to bidding and down to implementation. “It is trusted that the PPP bill will be high on the agenda of the 17th Congress.

�is law is badly needed to deliver the infra-structure essential for economic growth,” he said.  Ferrer, whose company is a mainstay in the infrastructure arena, cited his group’s good and bad experiences in investing in the program. It won the P17.5-billion deal to modernize the Mactan-Cebu Interna-tional Airport (MCIA), as well as the mul-tibillion-peso contract to construct school facilities in several regions in the country.  “We saw �rsthand how e�ciently PPPs, such as the PPP School Infrastructure Pro-gram, and MCIA were able to deliver ser-vices and feed into national investments,” he said.  “However, while promising, we should acknowledge that the program is still in its infancy. We experienced di�culties in some cases that delayed or even prevented us from delivering services to the majority

of the Filipino people,” Ferrer said.  He was referring to the botched con-tract for the modernization of the  Philip-pine Orthopedic Center.  “Moving forward, we hope that we can address these issues to make a stronger program that will attract more investors,” Ferrer said. “We believe that our incoming President shares and supports this objec-tive and, as an action man himself, will put forward the PPP as a priority legisla-tion and, certainly, as an urgent matter for implementation and monitoring.” Duterte earlier made statements that his administration will continue the PPP Program, as this is another av-enue for infrastructure development in the Philippines.  His spokesman, Peter T. Laviña, was not available when sought for his camp’s take on the issue.

BusinessMirrorwww.businessmirror.com.ph Friday, May 27, 2016 A3

BusinessMirror [email protected] A4

B M T. C | Mindanao Bureau Chief

@awimailbox

Friday, May 27, 2016

BMReportsDeaths at Close-Up concert infuriate Duterte

DAVAO CITY—A fuming President-elect Rodrigo R. Duterte on Wednesday

midnight said he will implement a massive shake-up of National Police officials on the very first day of his assumption of office in Malacañang, as he expressed anger over the death of five persons due to suspected drug overdose at a rock concert in Pasay City on Sunday.

B J L. M @jonlmayuga

THE Climate Change Commission (CCC) is set to lead a sweeping review of the country’s energy policy to cut

down the country’s dependence on coal as fuel source, and prompt a shift toward a low-carbon development path.

President Aquino, who is also the chair-man of the climate-change body, signed on May 18 Commission Resolution 2016-001, a move lauded by environmental and climate justice activists. The resolution designates the CCC to lead key govern-ment agencies in facilitating within the next six months the national policy review and framework development toward low-carbon pathway.

According to the CCC, the resolution is envisioned to set in place a clear govern-ment policy on coal-fired power plants, which are the biggest sources of man-made carbon emissions, accounting for about 35 percent of global greenhouse-gas (GHG) emissions.

Aside from the President, CCC Vice Chairman Emmanuel de Guzman and commissioners Frances Veronica Vic-torino and Noel Antonio Gaerlan signed the resolution.

Under the resolution, the Depart-ment of Environment and Natural Re-sources (DENR), the Department of En-ergy (DOE) and the National Economic and Development Authority (Neda) are urged to harmonize policies and regu-lations on new and existing coal-fired power plants, and assess their impacts on the environment, as well as include low-carbon development and climate-change adaptation and mitigation strategies in the formulation of all national and local development plans.

According to de Guzman, the review will pave the way for a swift transition to renew-able energy; enhance energy efficiency and conservation; and ensure clean, affordable

and reliable energy for the entire country.The country currently has 19 operat-

ing coal-fired power plants, and 27 other projects have been approved and are now in various stages of development. With these projects having been completed, the share of coal in the country’s energy mix is expected to further go up.

Around 70 percent of the DOE-approved projects that will go online in 2019 will be from coal, which would also mean that by 2021 the overall dependence on coal will be at 50 percent, as compared to 39 per-cent in 2016.

Ironically, six years after the passage of the renewable-energy (RE) law, the RE component in the overall power mix was 34 percent. Since then, RE share went down by 5 percent.

According to de Guzman, the expected transition, as hoped for in the signing of the CCC resolution, is supported by exist-ing laws. These laws, such as the Electric Power Industry Reform Act (Epira) of 2011 and the RE law of 2008, are both for environment-friendly, indigenous and low-cost sources of energy, accord-ing to pundits.

De Guzman added that the CCC reso-lution is an affirmation of the govern-ment’s resolve to mainstream low-carbon development pathway, in accordance with the country’s commitment under the United Nations Framework Convention on Climate Change (UNFCCC) and its intended nationally determined contri-bution (INDC).

Meanwhile, the Center for Energy, Ecol-ogy and Development, led by its convener Gerry Arances, said the move is a welcome development and may, in fact, be a legacy of Mr. Aquino, whose six-year term will of-ficially end on June 30.

“While it might be late, dahil ang ta-gal nang demand ito, we are still lauding this move by the President for heeding the call of communities and various sec-tors in finally leaving behind a legacy of

starting the shift to clean and renew-able energy,” Arances said.

Arances further challenged President Aquino to order the DOE and the DENR to halt all permitting processes and do the necessary review and correspond-ing interventions to upscale accessible, affordable and safe RE systems in the country.

In October last year, the Philippines submitted during the Conference of the Parties to the UNFCCC its INDC, promis-ing to reduce the country’s GHG emissions by 70 percent by 2030.

The INDC is subject to support provided by developed countries.

The reductions will come from the en-ergy, transport, waste, forestry and indus-try sectors.

As a member of the UNFCCC, the Philip-pines supported the adoption of the global climate accord reached in Paris, France, in December last year. Last month in New York, President Aquino—through Envi-ronment Secretary Ramon JP Paje—signed the Paris Agreement in behalf of the Philip-pines, on the recommendation of the Cabi-net Cluster on Climate Change Adaptation and Mitigation.

“Philippine climate ambition is predi-cated on changing our energy pathways that ensure we send the right policy sig-nals to the investment community and generate jobs for the modern economy,” de Guzman said. He said an urgent review of the govern-ment’s energy policy is necessary given the growing number of new coal-power plants in the country and the global de-mand for drastic GHG emission reduc-tions to achieve the primary goal of the new global climate deal reached in Paris last year, which is to limit global warm-ing to 1.5 degrees Celsius.

“We must aim for nothing less than the transformation of the Philippine economy with a low carbon-energy development pathway,” he added.

Aquino OKs energy-policy review to wean PHL from coal addictionB R C @ReaCuBM

ENTREPRENEURSHIP and innovation are the drivers of economic growth all over the world, and the Philippines must

champion the cause of Filipino entrepreneurs to help them shine and grow their businesses, according to a global business magnate.

Richard Branson, speaking at the first ANC Leadership Series Forum held at the Sofitel Ho-tel in Pasay City on Thursday, said: “I think, for the Philippines to truly shine, you need thou-sands of entrepreneurs to do business here.”

The founder of the Virgin Group said the country can ensure the growth of Filipino en-trepreneurs to benefit from the rising trend of entrepreneurship and innovation that have been happening globally.

He said a successful entrepreneur must be a problem solver, caring for other people, and daring to achieve what nobody has done before. “It is with all these traits that enable one to do more business, which, in turn, will help uplift the economy,” he said.

“An entrepreneur is somebody who creates something that makes a difference in people’s lives. My attitude in life is giving everything I can in solving a problem. And I get enormous satisfaction in trying to achieve something that nobody has done before,” he shared.

To do good business, healthy competition should be present in a country’s business en-vironment, Branson said, adding that he plans to do business in the Philippines someday.

“If the country is dominated by 20 or more big corporations, it will be difficult for foreign companies to do business here. But a little bit more competition from overseas should be good for the country,” he said.

Branson’s Virgin Group consists of more than 400 companies. The group started with a record company, which was named Virgin Records.

Virgin never stopped expanding since it started— entering the airline business, health care, fuel, mobile phone and even trying to start a space tourism industry.

“If we can make sure that space travel is safe and affordable, then I think we have a huge market,” he noted.

During the forum, Branson discussed his

Virgin Galactic venture, which started in 2004 and is envisioned to take paying customers to a tour of suborbital space. However, he noted that a test-pilot error set back the business in-definitely. The space tour would have asked one passenger to shell out about $250,000 per trip.

“We started 10 years ago, I thought we would be in space right now, but we encountered a major setback 18 months ago,” he explained. Branson and his Virgin Galactic team, com-posed of 600 engineers and the 800 astronauts, are still hopeful to launch the project in the near future, saying “failures are part of busi-ness, since they teach one to take risks and learn from them.” “If you have a good idea and it will create a positive impact on other people’s lives, then do it,” he said.

Branson also explained the reason they get enormous support from those employed by the Virgin group is because they go out of their way to make the workers happy.

He added that the best-run companies are those that have people who genuinely care for others. “I think the best companies are those that have people who genuinely care about their people’s well-being. We go out of our way to make sure that the people who work for our companies are happy.”

He encouraged people who attended the forum to go and try their hand at entrepre-neurship, because it will help in deciphering when an idea is good or not.

“There will always be risks, but one must try first to know if an idea is good. That’s how one can learn,” Branson said.

Branson rallies the Philippines to champion its entrepreneurs

Duterte called for a wee-hour news conference at a downtown hote l here t hat l asted unt i l Thursday dawn. He did not hide his annoyance over the deaths of the concertgoers attending the Close-Up Forever Summer open-air concert, hosted by Belgian DJ Dimitri Vegas and Like Mike. Close-Up is a toothpaste brand of Unilever.

“There will be a massive reshuf-fle of the police, including the NBI [National Bureau of Investigation] and the PDEA [Philippine Drug Enforcement Agency],” he said. “You exchange places here, those in Compostela Valley and Surigao, you go to Manila; and you in Ma-nila, you go to Mindanao,” he said. “Or you [do] want to be stationed in Jolo?”

“It’s a failure of intelligence. Any Grade 1 intelligence would tell you that a rock concert like this is a market [for] drug [push-ers],” Duterte said.

Citing initial investigations point-ing to the abuse of prohibited sub-

stances may have caused the deaths, Duterte said he was at a loss why the prohibited drugs were sold within and around the concert venue. “Imagine, lima, at nagputukan ang mga utak? Because it’s a deadly mix intended to kill people,” he said.

“And what are the police doing there? The NBI, the PDEA? There are a lot of you [out] there and, still, this happened,” Duterte added.

“There will be massive reshuffle, even [among] the generals. When I reshuffle, it [will involve all of] you, not only the officers,” he said.

Expressing his disdain on why the government was unable to stop the manufacture of meth-amphetamine hydrochloride, or shabu, inside the Bilibid Prison in Muntinlupa City, Duterte said “all of you in Muntinlupa, ship out, start packing things.”

“You either go to Iwahig or at the Davao Penal Colony here. You would experience how the NPA [New People’s Army] would attack you there,” he said, citing the April 2007 raid of the armory in Dapecol,

50 kilometers northeast of here. The NPA carted away 103 rifles and assorted weapons. “I am not threatening you [in any way], but I will do it,” Duterte said. His directive may also be a reflec-tion of the widespread perception that some policemen have links, or actually benefit, from the illegal- drug trade. “Almost all of them are

involved, or into drugs,” he said. Duterte added that he is planning to acquire portable blood sampling gadgets from Japan to be used in for drug testing, especially among policemen, when he asssumes office.

“I do not like the urine test, they can fake or hide it. I want to see them tested of their blood in front of me,” he said.

It’s a failure of intelligence. Any Grade 1 intelligence would tell

you that a rock concert like this is a [big] market [for] drug [pushers].” —D

For the Philippines

to truly shine, you need thousands of entrepreneurs to do business here.” —B

DUTERTE

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

AseanFriday

$500B

Zero tax on Indonesia’s bonds seen reviving dying sukuk marketINDONESIA’S plan to scrap a

tax paid by bondholders on their interest payments looks set to

inject new life into the nation’s ailing Islamic finance industry.

“Zero tax will definitely encour-age more participation by govern-ment funds in the Indonesian sukuk market,” said Abas A. Jalil, chief ex-ecutive officer of consultancy Ama-nah Capital Group Ltd. in Kuala Lum-pur. “Having reputable government funds as investors in the sukuk mar-ket would create ‘ride along’ interest among foreign investors.”

The government is considering cutting the levy to zero for all local-currency sovereign bonds from 15 percent for domestic investors and 20 percent for international ones, said Scenaider Siahaan, director of debt portfolio and strategy at the finance ministry’s budget financ-ing and risk management office. The move should mean holders of the securities would accept lower yields, compensating for the loss to the treasury from the tax reduction.

The proposal is the latest measure by the world’s most-populous Mus-lim nation to revive Islamic bank-

The amout of funding needed by Indonesia for its new roads,

railways and power plants over the next five years

plants, and the state budget is only capable of contributing 30 percent, Sofyan Djalil, head of economic plan-ning body Bappenas, said in Novem-ber. Much of the shortfall could be financed through bonds or sukuk, giving a boost to the $2-trillion global Islamic finance industry. Indonesia’s bond yields are the highest in South-east Asia, making it more costly for the government to raise funds to spend on infrastructure. Even so, the premium makes the debt attractive to overseas investors in an environ-ment of low or negative interest rates.

President Joko Widodo is taking steps to prop up Indonesia’s $16-bil-lion Islamic finance industry more than five years after the central bank asked the tax department to look into

double taxation applied on sukuk. A five-year blueprint unveiled in 2014 aims to strengthen the capital base of lenders, improve the management of funds used for the annual pilgrimage to Mecca and increase the number of experts. The president is chairing a new committee tasked with bringing fragmented regulations under one roof. Financial products governed by religious tenets currently have to comply with the regulations of Bank Indonesia, the Financial Services Authority and the National Ulema Council of Shariah scholars.

Switching pockets“RIGHT now we pay higher yields but get revenue from the withhold-ing tax, so we’re only moving money

from our left pocket to our right pocket,” Siahaan said in an interview in Jakarta.

While the plan alone isn’t enough to rejuvenate Indonesia’s Islamic fi-nance industry, bond issuers should at least consider sukuk as a viable al-ternative, said Raj Mohamad, man-aging director at Singapore-based consultancy Five Pillars Pte.

“Indonesia needs to work toward standardization and harmonize the Islamic financial regulatory frame-work,” Raj said. It needs to also “ex-plore offering some incentives, which most countries would offer to kick-start new initiatives,” he said.

Growth in Shariah banking assets picked up to 4 percent last year, af-ter contracting 15 percent in 2014, government data show. That’s down from 48 percent in 2010. PT Bank Nagari issued five-year Shariah-compliant notes in January. Bank Syariah Mandiri and PT Bank May-bank Syariah Indonesia are also gearing up to sell Islamic debt.

“Clearly, the move is a step in the right direction,” said Johar Amat, head of Treasury at OCBC Al-Amin Bank Bhd. in Kuala Lumpur. “If the plans come to fruition, this initiative will serve as yet another landmark endeavor by the Jokowi administra-tion to catalyze the development of Islamic finance.” Bloomberg NEws

MALAYSIA may bar govern-ment-linked companies and those stand to benefit

from public contracts from making political donations, in an effort to tighten rules on such funding before the next election.

A committee looking at the mat-ter may also recommend that private donations from abroad be prohib-ited, even if the money is held by Malaysians, said Paul Low, minister in the Prime Minister’s Department. The committee aims to complete a report by July, he said.

“The key criteria is to determine the extent of conflict of interest,” Low told reporters in Kuala Lumpur on Wednesday.

The move to streamline dona-tion rules comes after a year of funding scandals in the country, and before an election due by 2018. Prime Minister Najib Razak was cleared in January of graft after revelations that $681 million made its way into his personal bank ac-counts before the last election, held in 2013.

The government said the money came from the Saudi royal family and was a private donation, and that most of it was later returned. Najib has denied any wrongdoing.

The premier announced the for-mation of the committee in August.

Bloomberg News

Malaysia may bar political donations from state firms

ing after the industry shrank to 3.5 percent of total financial assets in March, from 5 percent a year earlier. Only one Indonesian company has issued rupiah sukuk in 2016 for the equivalent of $7.3 million compared with $5.9 billion worth of ringgit sales in Malaysia, the biggest Sha-riah-compliant debt market.

Indonesia needs to spend $500 billion over the next five years  to build roads, railways and power

FOREIGN tourists play at a beach as they watch the sunset in Bali, Indonesia on Wednesday. AP

The WorldBusinessMirror [email protected], May 27, 2016A6

WHEN Iran and global powers signed a nuclear deal last year, supporters

and detractors agreed on one thing: the accord would get billions of in-vestment dollars flowing into the Islamic Republic. �e only question was how much.

�e answer so far—“not much”—is infuriating Iranian o�cials, who are demanding more US conces-sions, including access to dollar-denominated trades, after curbing their nuclear program.

In the US opponents of the original agreement are warning against any further easing of re-strictions, vowing to hold up Trea-sury Department nominees to en-sure it doesn’t happen.

“�e deal was so contentious for both parties that the acrimony af-ter the implementation is to be ex-pected,” said Elizabeth Rosenberg, a senior fellow at the Center for a New American Security in Washington. “�ere are active detractors that are trying to collapse the deal.”

$55 billionTHE US estimates that $3 billion of $55 billion in frozen assets that are supposed to be released to Iran has made it back to Tehran so far. Iranian o�cials—who say they need the money to buy airliners, improve infrastructure and boost a struggling economy—say Euro-pean and Asian banks are reluctant to deal with them because they fear US sanctions.

�e House Foreign A�airs Com-mittee and the Senate Banking Com-mittee discussed the Iran deal, com-pleted last July, in separate hearings on Wednesday. Acting Under Secre-tary for Terrorism and Financial Intelligence Adam Szubin, whose Senate con�rmation to the post has been held up for more than a year, testi�ed before both panels.

“Since Iran has kept its end of the deal, we must uphold ours,” Szubin said. While the US “will not stand in the way of permissible

business activities involving Iran” and other countries, he said that oth-er US sanctions against Iran remain in e�ect.

“�at means we will continue to prohibit US persons from invest-ing in Iran, importing or exporting to Iran most goods or services, or otherwise engaging in commercial or �nancial dealings with most Ira-nian persons or companies,” he said. “Iran will also continue to be denied access to US markets.”

Szubin spent most of his day as-suring lawmakers that the Obama administration is still penalizing Iran for  its missile tests, support for terrorism and human-rights violations.

Some Iranian entities, includ-ing about 200 individuals and companies associated with the Is-lamic Revolutionary Guards, are still o�-limits under remaining US sanctions, and Iran can’t access the US �nancial system, including con-ducting transactions in US dollars.

“How is it we are in essence en-couraging foreign entities to do business with Iranian entities yet threatening sanctions for possibly dealing with” the Revolutionary Guards? asked Sen. Bob Menendez, a New Jersey Democrat who op-posed the nuclear deal.

Szubin responded that it’s “a mo-ment of great potential” because “there are those within the Ira-nian system who’d like” to see the Guards’ role reduced.

Sen. Elizabeth Warren said Iran needed to reform its economy if it really wanted to receive foreign in-vestment. “�e best way to change Iran’s behavior is to keep the pres-sure on,” the Massachusetts Demo-crat said in a response to critics of

the accord. “�e worst is to score po-litical points in a way that gives Iran an excuse not to make the changes that they need to make.”

Kerry-Zarif meetingsIN a previous e�ort to resolve the dispute over whether the US is keeping its end of the nuclear deal, Secretary of State John Kerry and Iran Foreign Minister Mohammad Javad Zarif met twice last month on the sidelines of a UN confer-ence. Kerry then met with Euro-pean banking representatives in London this month to say non-US banks won’t be penalized for conducting legitimate business with Iran.

“�e Iranians thought they’d get more help from the banks,” said Matthew Levitt, a former deputy assistant secretary of treasury. “As long as they engage in illicit con-duct, they’re going to �nd banks not willing to engage with them.”

Worried that the Obama admin-istration’s e�orts will go too far, Re-publican Senators Marco Rubio and Mark Kirk warned Treasury Secre-tary Jacob J. Lew in a May 19 let-ter that they will hold up Treasury Department nominees until they receive assurances that “the US will not enable Iranian access to US dol-lars elsewhere in the international �nancial system, including assist-ing Iran in gaining access to dollar payment systems outside the US �-nancial system.”

Banking finesMAJOR non-US banks remain wary after paying $15 billion in �nes and signing settlements for violating earlier US sanctions. French bank BNP Paribas SA agreed to pay $8.9 billion in July 2014 for violating US sanctions against Sudan, Cuba and Iran. Germany’s Commerzbank AG agreed to pay $1.45 billion for mov-ing funds through the US �nancial system for Sudan and Iran.

�at history makes doing busi-ness with Iran a hard sell, despite US assurances.

“Promotion of banking and commercial activity in that envi-ronment is completely anathema to the message the US government has been sending internationally for last 15 years,” said Juan Zarate, chairman of the Financial Integri-ty Network who was a White House

adviser on combating terrorism un-der President George W. Bush.

While attacking critics of the Iran deal for having overestimated how much money would �ow to the Islamic Republic, the Obama ad-ministration has also said Iran’s be-havior may be sti�ing investment.

Hezbollah support“IF you were routinely testing bal-listic missiles that violate the Unit-ed Nations’ sanctions that govern your ballistic missile program, well, that’s not going to inspire the con-�dence of business leaders that this is a safe place to do business,” White House Spokesman Josh Earnest told reporters on May 12. “If you are supporting terrorism around the world, that’s not going to be particu-larly persuasive to business leaders that Iran is a good place to make an investment.”

Iran continues to provide �nan-cial and military support for the He-zbollah militia in Lebanon, which is listed as a terrorist organization by the US. �e Treasury Department is trying to cut o� funding to the group, whose soldiers are in Syria defending President Bashar al-Assad against US-backed rebels.

�e Financial Action Task Force, a 34-government agency sponsored by the Organisation for Economic Co-operation and Development, has also cited Iran for �outing e�orts to stop money laundering and terror-ism �nance. �e only other country on the list: North Korea.

To really draw investment, Iran needs to embrace wholesale eco-nomic and political reform, said Su-zanne Maloney, a senior analyst at the Brookings Institution.

“Tehran’s challenges in luring capital is further complicated by its reputation for provocative domes-tic and regional behavior,” Maloney wrote in a May 20 report. “As the old adage goes, capital is a coward. And the Islamic Republic is a haunted house.” Bloomberg News

Iran still waiting for new investments after nuke deal

ISTANBUL, Turkey—The World Hu-manitarian Summit held in Istanbul on May 23 and 24 failed to achieve

its fund-raising goals. With the excep-tion of the German Chancellor Angela Merkel, none from the group of the rich-est courtiers or of the UN Security Coun-cil attended. And the summit could not mobilize the much-needed resources it had hoped for.

At the summit’s closing session, both Turkish President Recep Tayyip Er-dogan and the United Nation Secretary-General Ban Ki-moon expressed strong “disappointment” on the absence of leaders of the most powerful countries.

Though they reiterated their appeal for solidarity to rescue the most vulner-able people on Earth—130 million vic-tims of con�icts and natural disasters, and growing—none of them could hold out or o�er any hope soon.

“Their absence [Group of 7 (G-7) and Security Council leaders] is not an ex-cuse for inaction,” Ban said. The resourc-es required to rescue the lives of tens of millions of human beings represent only 1 percent of the total world military expenditure, he added.

Ban showed no signs of optimism regarding an end soon of con�icts in Syria, Yemen, South Sudan, among oth-ers, while recalling that every year the UN organized a pledging conference and “countries are tired of that.” He also said that currently 80 percent of the UN humanitarian resources are spent on made-made crises.

For his part, Erdogan reiterated veiled threats to the European Union (EU), saying that if this bloc does not ful�ll its agreements with Ankara, the “law on returnees” [refugees deported from EU countries to Turkey] may not be passed at the Turkish Parliament.

The EU promised Turkey $3 billions in 2017, to add to an equal sum prom-ised last year, in its refugees-deporta-tion deal with Ankara, sealed in March.

The EU also is to authorize the entry to its member countries without visa. Nevertheless, the authorization will not be implemented soon as promised, as the EU now demands that Turkey ful�lls a long list of requirements.

A foretold political failureDURING the two-day summit, leaders of 173 countries, including 55 heads of state or government, promised to do more for the 130 million civilians who are victims of con�icts and natural di-sasters.

Nevertheless, the community of hu-manitarian organizations have shown skepticism about such announcements that would end up in e�ective commit-ments and if the expected funds will be employed in the right way.

The humanitarian sector is failing to protect civilians from violence, Jan Ege-land, secretary-general of the Norwe-gian Refugee Council (NRC) said, while commenting on how humanitarian aid has to be more e�cient and cost-e�ec-tive not to fail those most in need.

According to Egeland, humanitarian

assistance does not reach thousands of victims who are among the most vul-nerable of all. “In Fallujah, Iraq, there are now over 50,000 civilians who are besieged, prey to the Islamic State [IS],” Egeland cited as an example.

“Nobody is helping them, nobody is reaching them,” he warned. “The Iraqi government is not helping them, the humanitarian organizations cannot reach them.”

There are thousands of victims like them who are in dire need but are not reached. In Yemen, Engeland said, there are 20 million civilians among the most vulnerable, while stressing that coali-tions supported by Western countries are attacking civilians.

Egeland expressed hope that lead-ers can ask themselves if they can at least stop giving arms, giving money to those armed groups that are system-atically violating the humanitarian law, and bombing hospitals and schools, abusing women and children.

Fighting parties, be they govern-mental or militias or opposition or rebels, still get weapons that they use to blow up hospitals and kill ci-vilians, he warned. “Let’s blacklist that armed group and that army and that government.”

“We lack governments, saying they will also uphold humanitarian law and the UN refugee convention, keeping borders open and keeping the right of asylum sacrosanct,” Egeland added.

Egeland emphasized that “all bor-ders should be open…in Europe, in the Gulf states…in the United States.”

“As Europeans, when we initiated the refugee convention we really felt that asylum was important when we were the asylum-seekers. Why don’t we think it’s equally important now, when we are those to whom people come for asylum?”

From 2011 to 2013, Egeland was the Europe director of Human Rights Watch, prior to joining NRC where he took up his post as secretary general in August 2013. In 2006 Time magazine named Jan Egeland one of the 100 “people who shape our world.”

“More resources are sorely need-ed…but more resources will not solve the problem,” said Francesco Rocca, vice president of the International Federation of Red Cross and Red Cres-cent Societies.

Speaking on behalf of 190 national Red Cross and Red Crescent Societies, Rocca demanded more support to strengthening national and local ac-tors, who are key to the solution.

“Strengthening local and national capacity would have an impact,” he said. “Yet, scant resources have been channelled though those key local actors or invested in their long-term capacities.”

Peter Maurer, president of the Inter-national Committee of the Red Cross, warned, “the less we help in con�ict zones, the more people will move,” and that “sticking people in camps is not the solution.” IPS

HUMANITARIAN SUMMIT, A BIG ‘DISAPPOINTMENT’

IRAN seeks to upgrade sectors of its economy, including tourism and retail, that were damaged by sanctions. BLOOMBERG

GERMAN Chancellor Angela Merkel arrived at the Group of Seven (G-7) leaders’ summit in Japan with a di-

minished �ank of pro-austerity allies.As leaders from the United States, Japan,

Germany, France, the United Kingdom, Italy and Canada prioritize tackling a global slow-down, the debate over stimulus versus belt-tightening is poised to shift with Canadian Prime Minister Justin Trudeau’s �rst appear-ance at the G-7 table. Since taking power last November, Trudeau has moved Canada’s eco-nomic focus toward infrastructure spending and cash transfers from predecessor Stephen Harper’s mix of tax cuts and de�cit reduction.

Merkel, 61, was scheduled to meet on Thursday with Trudeau, 44, on the sidelines of the G-7 summit in Ise-Shima in central Japan.

“The Canadian position will be di�erent,” Trade Minister Chrystia Freeland told report-ers on Wednesday in Tokyo. “Canada, at this meeting, will be speaking strongly on the side of investing for growth rather than in fa-vor of austerity.”

The minister singled out the G-7 host, Japanese Prime Minister Shinzo Abe, who has made �scal and monetary stimulus a corner-stone of his economic policies. Abe is a “real

pioneer in emphasizing the need for govern-ments to use �scal tools and, as you know, our government is very much in agreement.”

G-7 discordTHAT message isn’t likely to go down well with Merkel, who has lost a G-7 ally in Harper—his conservative government was a bulwark against calls for stimulus in favor of �scal restraint and austerity. That leaves the German chancellor with UK Prime Min-ister David Cameron as a fellow champion of �scal restraint.

Leaders in Ise-Shima may not be able to move beyond the discord of a G-7 �nance ministers’ meeting last week, also in Japan, where they agreed that each member may draw from a menu of monetary, �scal or structural reform measures as they see �t.

Germany has embraced that language, saying it isn’t against limited infrastructure investment that bolsters digital access and other targeted areas, while pushing the argu-ment for structural reform as the best option, according to a German o�cial who briefed reporters in Berlin on Friday. The o�cial spoke on condition of anonymity in line with government protocol. AP

Merkel’s austerity allies dwindle as Trudeau debuts at Group of 7

The amount of frozen assets of Iran

$55B

[email protected]

ISE, Japan—Japanese Prime Minister Shinzo Abe urged fellow leaders of the Group of

Seven (G-7) advanced economies to unite on �ursday in forging a more urgent, coordinated response to the faltering global recovery.

Abe and his counterparts sat down at a big round table for the �rst of their summit working ses-sions, after strolling through the grounds of the Ise Jingu Shrine, a tranquil, densely forested landmark that is the holiest site in the Japan’s indigenous Shinto religion, and then joining a group of children in a tree-planting ceremony.

�e G-7 gathering dovetails in many ways with Abe’s long-term diplo-matic, political and economic agenda.

A dramatic statement about global economic risks and a strong show of support for public spending to help spur growth could help Abe justify extra stimulus and possibly provide political cover for postpon-ing an unpopular but badly needed increase in the sales tax next April.

An aide said Abe planned to use data charts dramatically illustrating the severity of the recent slump in commodity prices and the slowdown in China. “�ere is a concern that the sluggish economy might last some time, and that Abe hopes to share a common notion about the potential risks,” said Hiroshige Seko, a deputy

chief Cabinet secretary.Abe hopes the group would “take

leadership as the G-7 and convey a powerful message to the rest of the world,” he said. Seeking to enhance Abe’s legacy, the message would be dubbed the “Ise-Shima” principle, he said.

�e leaders were expected to turn their attention to trade, politics and diplomacy and on climate change and energy during talks later on �ursday.

�e annual summit brings to-gether the leaders of Britain, Can-ada, France, Germany, Italy, Japan and the United States. It is taking place amid extraordinarily tight security around the remote sum-mit venue, with uniformed police standing guard at close intervals on both sides of roads and randomly in forests, rice �elds, soccer �elds and other locations.

Many of the issues to be discussed during their two days of talks are linked to other Abe policy priorities. �ey include maritime security—code for concerns over China’s ex-panding presence in disputed areas of the South China Sea; initiatives

on global health, including funding for �ghting terrorism and pandem-ics; and a focus on women’s empow-erment, which Abe has promoted as “womenomics.”

Both in the G-7 meetings and in “outreach” sessions with other countries’ leaders on the sidelines of the summit, the agenda includes “quality infrastructure investment.” Since taking o�ce in late 2012, Abe has circled the globe, visiting doz-ens of countries to promote sales of Japanese infrastructure technology, especially coal and gas-�red power plants and bullet trains.

“We think Japan has demon-strated to the rest of the world what quality infrastructure is like,” said Japanese Foreign Ministry Spokes-man Yasuhisa Kawamura, “and we’re very happy to share our experiences and expertise.”

Japan planned to propose ex-panding support, including develop-ment assistance loans, for building roads, power plants and other infra-structure around the world, seeking a target of $200 billion in �nancing.

Tokyo also plans to spend about $6 billion on education, training and job creation for 20,000 people in the Middle East, to help promote devel-opment and social stability in the re-gion and counter the chronic unem-ployment and economic disparities that are contributing to extremism and violence, the Japanese govern-ment said.

On gender issues, Japan plans to help improve schooling conditions for 50,000 girls, mainly in Africa and South Asia, and provide training for 5,000 women in �elds, such as ma-ternal and child health, it said.

Japanese o�cials have highlighted

joint e�orts on corruption, terror-ism, global health and migration, which has become a huge headache, especially for European nations, as other top priorities.

“�ose who criticize us should rather think how to increase their assistance because what Europe provides is already massive,” Don-ald Tusk, president of the European Council, calling for G-7 support and leadership. “And honestly speak-ing, if they don’t take the lead in managing this crisis, nobody else will. I will appeal to G-7 leaders to take up this challenge.”

Tusk said the EU was seek-ing more support for refugees and creation of resettlement schemes and other forms of legal migration around the world. A possible exit from the European Union by Britain, depending on a June 23 vote, is also hanging over the talks.

US President Barack Obama ar-rived in Japan on Wednesday and had an evening meeting with Abe. After the summit ends on Friday, Obama plans to visit the peace park in Hiroshima, becoming the �rst sitting US president to visit the city on which the US dropped an atomic bomb in 1945 in the closing days of World War II. AP

briefs ABE PROTESTS TO OBAMA

OVER DEATH OF WOMAN NEAR OKINAWA BASE

YEMENI OFFICIALS: AIR STRIKE KILLS 11 FROM SAME FAMILY

I.S. PREVENTS FALLUJAH RESIDENTS FROM FLEEING

RUSSIA ACCUSES TURKEY OF SUPPLYING I.S. EXTREMISTS

Japan urges G-7 to tackle global economic risks

The amount of financing support that Japan plans to propose for infrastructure abroad

$200B

WorldBusinessMirror

The

A8 | Friday, May 27, 2016 • Editor: Lyn Resurreccion

TOKYO—Japanese Prime Minister Shinzo Abe on Wednesday made a direct protest to President Barack Obama after the arrest of a US citizen working at a military base in Okinawa, in connection with the death of a Japanese woman.

Standing next to Obama, Abe told reporters after a meeting on the sidelines of the Group of Seven lead-ers’ summit in Ise-Shima in central Japan that his nation would “rigor-ously” investigate the incident.

Kenneth Franklin Shinzato, a 32-year-old former US Marine, admit-ted to killing the 20-year-old woman, Kyodo News reported, citing inves-tigative sources. The incident has triggered protests on the southern Japanese island, and led Okinawa Gov. Takeshi Onaga to request a meeting with Obama. Bloomberg News/TNS

SANAA, Yemen—The death toll of a suspected Saudi-led coalition air strike that hit a family’s house in southern Yemen has been raised to 11, including four children from one family, security o�cials and witnesses said on Wednesday.

The o�cials said that warplanes, thought to be Emirati, �red two mis-siles at the family’s house in the town of el-Mahala, in the southern province of Lahj. The house was �attened and only one child from the family sur-vived the strike, they said.

The o�cials said the home is adja-cent to a building that is suspected of housing Islamic militants. AP

BAGHDAD—The Islamic State (IS) group is preventing people from �ee-ing Fallujah amid a military operation to recapture the city west of Baghdad, a local Iraqi o�cial and aid groups said on Wednesday.

Thousands of civilians are estimated to remain inside Fallujah, about 65 kilo-meters west of Baghdad, which IS has held for over two years. On Sunday government forces launched a large-scale o�ensive, teaming up with para-military troops and backed by aerial support from the US-led coalition.

Nearly 20 families have �ed from Fallujah’s outskirts, where sporadic clashes have been taking place, since the o�ensive started, said Shakir al-Issawi, the head of the council in the nearby town of Amiriyat al-Fallujah. Al-Issawi said no families managed to �ee on Wednesday, as IS militants tightly control the city outlets. AP

LEADERS of Group of seven (G-7) countries participate in a tree planting during a visit at Ise Jingu Shrine in Ise, Mie Prefecture, Japan, on Thursday, as part of the G-7 Summit. (From left) Eikei Suzuki, governor of Mie Prefecture; European Council President Donald Tusk; Italian Prime Minister Matteo Renzi; German Chancellor Angela Merkel; US President Barack Obama; Japanese Prime Minister Shinzo Abe; French President François Hollande; British Prime Minister David Cameron; Canadian Prime Minister Justin Trudeau; and European Commission President Jean-Claude Juncker. AP/CAROLYN KASTER

WASHINGTON—A new �nd-ing by the State Depart-ment’s internal watchdog

that Hillary Clinton clearly broke de-partment rules when she used private e-mail for government business once again focuses the presidential race on an issue the Democratic front-runner has worked for months to put behind her.

�e highly critical report, issued by the department’s inspector general and sent to Capitol Hill on Wednes-day, concluded that Clinton created a security risk and violated transpar-ency and disclosure policies.

It feeds into the narrative her Re-publican opponents have long worked to build: that Clinton does not follow the same rules as everyone else and that she has not been open with the American public.

�e 79-page report faulted Clinton for not seeking permission to use a

personal e-mail account and server, noting the investigation found “no evidence that the Secretary re-quested or obtained guidance or approval to conduct official busi-ness via a personal e-mail account on her private server.” Department officials “did not and would not—approve” of such a practice, the re-port added.

Clinton’s failure to promptly turn over all relevant e-mails also was criticized. “At a minimum, Secretary Clinton should have surrendered all e-mails dealing with Department business before leaving government service and, because she did not do so, she did not comply with the De-partment’s policies that were imple-mented in accordance with the Federal Records Act.”

�e report does not focus on Clin-ton alone. It also found a Republican predecessor, Colin Powell, to have

committed similar violations in using personal e-mails and failing to turn them over to the department.

�at �nding, along with the re-port’s sweeping criticism of the department’s “longstanding, sys-temic weaknesses” in the handling of electronic communications, provided Clinton some defense against the criticism.

“While political opponents of Hillary Clinton are sure to mis-represent this report for their own partisan purposes, in reality, the inspector general documents [show] just how consistent her email prac-tices were with those of other secre-taries and senior o�cials at the State Department who also used personal e-mail,” Clinton Spokesman Brian Fallon said on Wednesday.

But opponents wasted no time us-ing the charges about Clinton’s mis-conduct to sharpen their attacks, and

the report is certain to become a trea-sure trove for Republican opposition researchers.

In one particularly scathing ac-count, the report reveals that tech-nology sta�ers who raised concerns about Clinton’s use of e-mail in late 2010 were told to stop talking about it. One sta�er was told their mission was “to support the Secretary” and “never to speak of the Secretary’s personal email again,” according to the report.

Another sta�er warned that Clinton was sending and receiving e-mails that should be preserved to comply with open-records laws. �e sta�er was told “that the Secretary’s personal system had been reviewed and approved by Department legal sta� and that the matter was not to be discussed any further,” according to the report.

�e inspector general’s o�ce found no evidence that any such legal

review had been done. One of Clin-ton’s top GOP critics in Congress, Rep. Trey Gowdy of South Carolina, who chairs the Select Committee on Benghazi, said the report vindicates the controversial, long-running in-vestigation he has led into Clinton’s handling of the events surrounding the 2012 attacks on Americans in that Libyan city.

“If anyone wonders why the in-vestigation is not yet complete, the malfeasance and numerous problems identi�ed in this report are Exhibit A, and prove the committee has faced se-rial delays from day one at the hands of public o�cials who sought to avoid transparency and accountability,” Gowdy said in a statement.

Donald Trump brie�y mentioned the report on Wednesday during a rally in Anaheim, mocking Clinton. “She’s as crooked as they come. She had a little bad news today,” he said. “�e in-

spector general’s report. Not good.” Clinton sought to come into com-

pliance with open records require-ments in December 2014 by turning over some 30,000 emails to State that she said represented all of her government-related correspondence during her time there. But since that time, e-mails have emerged that should have been turned over but were not. �e inspector general called the December 2014 document dump “incomplete.”

Clinton said she had exchanged an equal number of personal mes-sages on the same e-mail account, while she was secretary of state, and that those messages had been deleted.

�e report also revealed a 2011 episode in which Clinton’s sta� raised concerns that her e-mail had been hacked, after she received a suspicious link from the personal account of an undersecretary. TNS

Hillary Clinton broke rules for using private e-mail, State Department says in report

UNITED NATIONS—Russia has ac-cused Turkey of supplying the Is-lamic State extremist group with components for improvised explo-sive devices.

Russia’s United Nations Ambas-sador Vitaly Churkin said in a letter to Secretary-General Ban Ki-moon circulated on Wednesday that the devices “are being widely used to commit terrorist acts.”

He said an analysis of chemical components of explosives captured from Islamists in the region of the Iraqi city of Tikrit and the Syrian city of Kobani, and a review of conditions for selling the components, “indicates that they were either manufactured in Turkey or delivered to that country without the right of re-export.” AP

BRUSSELS—Belgian prosecu-tors said on Wednesday they have questioned four sus-

pected Islamic State (IS) group re-cruiters, who may have planned new attacks in the country.

All four suspects were charged with participating in the activities of a terrorist group, the Federal Prosecutor’s O�ce said in a state-ment. Two were ordered arrested by an investigating judge, but one of them was released with an elec-tronic bracelet. �e other two were released under strict conditions.

�e statement said the four don’t appear to have links to the suicide bombers who struck the Brussels Airport and subway on March 22, killing 32 people.

Prosecutors said initial �ndings of the investigation into the sus-pects indicated there may have been plans for attacks in Belgium, but provided no details.

Searches were carried out in the port city of Antwerp and at least two other locations, Ternat and Borgerhout. �e prosecutors said some of those detained were plan-ning to go to Syria or Libya and join IS. All of the suspects are believed to have wanted to recruit people to go to those con�ict zones, the statement said.

Belgium has been one of the most fertile recruiting areas in Europe for the extremist group, which claimed responsibility for the attacks in Brussels as well as the November 13 attacks that killed 130 people in Paris.

No weapons or explosives were found in the eight sites searched on orders from an investigating judge, the prosecutors said in their statement.

�ey said no additional details would be made public in order not to hamper the ongoing investigation. AP

Belgium questions four IS suspects who may have planned attacks

Friday, May 27, 2016 •Editor: Angel R. Calso

OpinionBusinessMirrorA10

The China problem is not going away

editorial

PRESUMABLY within the next 45 days, the Per-manent Court of Arbitration (PCA) will render a decision in the arbitration case unilaterally brought by the Philippines, concerning the le-

gality of China’s “nine-dash line” claim over the South China Sea under the United Nations Convention on the Law of the Sea (Unclos).

This past week the government of China took out a large advertisement in Canada’s Globe and Mail newspaper stating its position on the case. Of course, it is a completely one-sided “legal opinion” that the Philippines had no right to bring this case before the PCA for a variety of reasons.

In October 2015 the PCA decided that it had jurisdiction in the mat-ter and has held hearings on the merits of the case. These hearings were also attended by observers from Indonesia, Japan, Malaysia, Thailand and Vietnam. Interestingly, though, the world is somewhat divided on the validity of the Philippines bringing its case to the PCA. Chinese allies Gambia, Cambodia, Lao PDR, Pakistan and Russia oppose “any attempt to unilaterally impose an agenda,” and agree that nations should resolve disputes between themselves.

Further, India supports Beijing’s position that the South China Sea dispute should not be “internationalized,” but resolved by the parties concerned. Arab League Secretary-General Nabil al-Araby said Arab countries support China’s position on “safeguarding” its sovereignty and territorial integrity.

But, obviously, it is what the United States thinks that is most im-portant, and here the news may not be what the Philippine government wants to hear.

While the Philippines speaks of “territory”, the US talks about “freedom of navigation,” and there is a huge difference between the two. Former US presidential candidate Patrick Buchanan wrote this past week, “But before we agree to support the claims of Manila and Hanoi against China’s claims, and agree to use US air and naval power, if needed, we need to ask some hard questions. What vital interest of ours is imperiled by who owns, or occupies or militarizes the Scarborough Shoal?”

Here is the critical point of his comments: “If US rights of passage in the South China Sea are not impeded by Chinese planes or ships, why make Hanoi’s quarrels and Manila’s quarrels with China our quarrels? And no vital US interest of ours is imperiled in the South China Sea.”

In other words, as long as the Chinese occupation of the Panatag Shoal does not hinder international sea trade, why should the US be involved at all?

The US might use its military to counter an armed Chinese attack on Philippine soil. But up to that point, what can we really count on the US doing, even in the event that the PCA rules completely in our favor? Perhaps, nothing, and that is what the government should plan for.

MUCH as some quarters believe otherwise, I think the May 2016 elections were a success. Not just because foreign observers said so, but because the results, so far, have been

holding up. And from all indications, the canvassing currently being conducted by Congress will bear that out, as well. This isn’t to say, however, that the elections were perfect.

Learning

There were ballot misdeliveries, 801 malfunctioning vote-counting machines (VCMs) that had to be swapped out for working units, 120 memory cards that needed replacing; without a doubt, there will always be room for improvement—opportuni-ties for learning.

For instance, the Commission on Elections’s (Comelec) hardline stance against voting receipts should now be reevaluated. In both 2010 and 2013 the commission believed that the use of these receipts would un-necessarily expose the elections to cheating attempts and baseless al-legations of fraud. It was half-right.

Coming into the 2016 elections, social media became the platform for a handful of people claiming that the receipts were not faithfully reflecting their electoral choices. A handful? Yes, I think only a hand-ful, but a handful relentlessly re-tweeted, reposted and echoed, un-til it seemed that you could not go online without seeing a brand-new accusation. In reality, however, both overseas and here at home, the voting receipts turned out fine, al-though the damage to the elections’ credibility was already done. So the Comelec got that right.

On the cheating front, I’ve yet to

hear a report of anyone being caught swapping out voting receipts, so I must—for now, at least—conclude that no significant cheating or vote-buying schemes were enabled by the use of voter receipts. So, the Comelec got that one wrong.

On balance, and based on no systematic study (time for that later, I should hope) whatsoever, it would appear that the voting receipts did, in fact, defuse a lot of apprehension about the accu-racy of the VCMs. Certainly, even a cursory scan of the allegations of cheating currently en vogue seem to indicate that the preferred target

is the consolidation and canvass-ing of votes. In other words, there is a great deal more distrust about the way the precinct results were summed up than about the precinct results themselves.

And if I’m being brutally frank about things, even that distrust of the canvassing system isn’t rooted in the system itself, but in how that system was administered. Which brings me to another learning opportunity.

The transparency server is a very good idea. To improve it even fur-ther, I am confident that a way can be found to open it up to a greater number of “watchers,” so to speak; to allow not just the media and the dominant political parties to use it, but everyone who can meet the se-curity regulations.

And that, by far, is not the only thing we can learn from these elec-tions. We could start studying 2016 right this very second and still not learn everything we can from it by May 2019. But start somewhere, we must.

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

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SPOXJames Jimenez

The transparency server is a very good idea. To improve it even further, I am confident that a way can be found to open it up to a greater number of “watchers,” so to speak; to allow not just the media and the dominant political parties to use it, but everyone who can meet the security regulations.

Friday, May 27, 2016

[email protected]

MOTHER’S Day has come and gone, but in a meeting of communications professionals that I recently attended, someone expressed his observation that, here in the Philip-

pines, “Every day is Mother’s Day.” He added that, perhaps, “Mother’s Day is bigger than Valentine’s Day.” There may be a grain of truth there, as not everyone will be inclined to celebrate Valentine’s Day—no matter how “sentimental” and “emotional” Filipinos are observed to be—but, in this culture, it is tantamount to a mortal sin to not pay some sort of tribute to our mothers on Mother’s Day.

New truths about Filipino momsmake for their kids.

And because they’re now more tech-savvy than ever, segurista (risk-averse) Filipino moms are also using technology to find the most advanced solutions and the best op-tions to protect their children from all sorts of harm.

This is demonstrated by the grow-ing accessibility (if not popularity) of more earth-friendly products for children, such as organic—or at least “green”—diapers, bottles, skin care and the like; kids yoga and vegetar-ian cooking classes; nature treks for families; and other products, services and activities that reduce children’s exposure to toxins, keep their bod-ies more active and on the go, while raising families’ environmental awareness.

According to Gino Borromeo, chief strategy officer and Truth Cen-tral champion for McCann World-group Philippines, one thing that sets Filipino moms apart from the other moms that McCann had studied around the world is that, more than just raising happy kids, “They want to raise children who are good citizens and good hu-man beings. That stood out in our local studies.”

Truth #3: Hello, “momagers” and “mompreneurs”!

Gone are the days of the “full-time housewives” and the “stay-at-home moms.” Thanks to telecommuting, work-from-anywhere platforms and the burgeoning of dynamic online communities, more Filipino moms now identify themselves as “work

at home moms [WAHMs],” as well as “momagers” and “mompreneurs.”

More moms are now bravely jump-ing into entrepreneurship, making mommyhood their careers and busi-nesses, while enjoying a wide range of support services that were previ-ously unavailable to mothers before them—such as online communities, mompreneur bazaars, mom-centric business workshops and the like.

Even dads and househelp can now get trained on how to better support moms at home, adding a touch of professionalism to house-hold management.

n n n

ALL of these shifts require a closer look at how we communicate to and empower women, and also how we educate families and those who form Filipino moms’ support structures today. To learn more about The Truth About Moms and other McCann Truth Studies, e-mail the author at [email protected].

Niña Terol (@ninaterol) calls herself a “communicator, connector and change-maker.” She heads corporate affairs for McCann Worldgroup Philippines, one of the largest and leading multinational communications firms in the Philip-pines, and is a founding trustee and board member of Business and Profes-sional Women (BPW) Makati, a non-profit organization aligned with the United Nations Women Empowerment Principles. She has also been widely pub-lished in local and international publi-cations and is a lecturer at the Ateneo de Manila University.

Besides the enduring impact of this commemoration on Filipino family life and culture, there are new realities that we must now consider in communicating and dealing with Filipino moms. With the ubiquity of technology and connectivity, the globalization of our economy and our mind-sets, and the demographic shift to a younger population come an evolution in the way the Filipino mom sees herself and her world.

Here are some key points based on McCann Worldgroup’s study on The Truth About Moms and its local adaptation:

Truth #1: Filipino moms now fuse classic with modern parent-ing styles.

Filipino moms value how they were raised by their own mothers, citing the importance of the pama-na, or passing on to their children a

legacy with traditional Filipino val-ues. However, they have also begun “upcycling” classic parenting ap-proaches with a modern twist.

For example, the values of sipag at tiyaga—hard work and persever-ance—now extend outside of house-hold chores and schoolwork, with more moms wanting their kids to also imbibe business savvy and an entre-preneurial mind-set. From passing on values and emotional sensibilities, Filipino moms are now also passing on functional sensibilities, such as financial literacy and responsibility.

Truth #2: The modern Fili-pina mom looks for “wellness in everything.”

Filipino moms today no longer define “wellness” simply in terms of their children’s health and nu-trition; they see and look for well-ness in every choice they need to

ANNOTATIONSTito Genova Valiente

TODAY is the day that so many of us have been waiting for: The State Department’s Office of Inspector General (OIG) has released its report about Hillary Clinton’s use of a private

e-mail server while she was secretary of state. The report does not uncover any smoking guns—no records of Clinton saying “Heh, heh, heh, they’ll never FOIA my e-mails NOW!!!!”—what it does lay out is deeply troubling. Even though her supporters have already begun the proclamations of “nothing to see here, move along.”

Clinton’s e-mail shenanigans sure don’t look like an honest mistake

It  lays to rest  the longtime Clinton defense that this use of a private server was somehow normal and allowed by government rules: It was not normal, and was not allowed by the government rules in place at the time “The department’s current policy, implemented in 2005, is that normal day-to-day operations should be conducted on an authorized Automated Information System [AIS], which has the proper level of security control to…ensure confidentiality, in-tegrity and availability of the resident information.” It also shreds the defense that “Well, Colin Powell did it, too” into very fine dust, and then neatly disposes of the dust. As the report makes very clear, there are substantial differences between what Powell did and what Clinton did:

Powell says he set up a private e-mail account, in addition to his internal ac-count, because at the time, the State Department “e-mail system in place only permitted communication among de-partment staff. He, therefore, requested that information-technology (IT) staff install the private line so that he could use his personal account to communicate with people outside the department.” This is a quite plausible reason that, around the turn of the millennium, a secretary of state would have wanted to use his own account. Powell seems not to have done enough to ensure that those records were maintained, which is a problem (though it’s not clear that he was aware that he should have turned those e-mails over). However, as far as I can tell, the most plausible explana-tion of Clinton’s behavior is that she set up her e-mail server for the express purpose of keeping those e-mails from being archived as records (and subject to Freedom of Information Act requests), which is a great deal more problematic than setting up an inadequately archived e-mail system because there’s no other way to use an increasingly vital commu-nications technology.

Powell had an outside line set up in his office, into which he plugged a lap-top, which he used alongside his State Department computer. The IT depart-ment was, in other words, aware that this was going on, and it seems to have come up in discussions of his drive to get everyone at State access to the In-ternet at their desk. While the quality of information about Powell’s Internet usage is not as high as it is about Clinton’s (after 10 years, memories fade, people become hard to contact and records de-grade), there’s no indication that he was less than transparent with staff. On the other hand, it’s quite clear that folks at State had no idea what was going on with Clinton’s e-mail server, and troublingly, at least two people who asked questions about it were apparently told to shut up and never raise the subject again.

Three things have changed pretty dra-matically since Powell’s day: the magni-tude (and appreciation) of cybersecurity threats; the quality of the State Depart-ment systems; and the government rules surrounding both record keeping and cybersecurity. One can argue that Powell should not have used a private computer during his tenure, but he seems to have done so in consultation with the IT folks, at a time when the policy surrounding these things was “very fluid” and the State Department “was not aware of the mag-nitude of the security risks associated with information technology.” By 2009, the magnitude of the risks was clear, and the policy was also much clearer. As far as the OIG could determine, Clinton took no action to ensure that she was in compli-ance with that policy, which, in fact, she emphatically was not. Officials at State told the OIG in no uncertain terms that they would not have approved her reli-ance on a personal e-mail server.

The OIG found only three instances in which State employees had relied exclu-sively on personal e-mail: Powell, Clinton

and Ambassador J. Scott Gration, the US emissary to Kenya from 2011 to 2012. Gration, who served under Clinton, was in the middle of a disciplinary process initiated against him for this e-mail use (among other things) when he resigned. So it is not only impossible to argue that this was, somehow, in compliance with State’s guidelines, but also impossible to argue that Clinton might have thought it was in compliance with requirements, unless she somehow failed to notice when or why her ambassador to Kenya went missing.

The OIG found evidence that the server was attacked, and that Clinton’s staff members (and presumably Clinton herself) were aware of it (Clinton, at one point, seems to have expressed concern that people might be trying to hack her e-mail). These incidents should have been reported to computer security person-nel, but OIG found no evidence that they were. Clinton’s supporters have offered the wan defense that “attacked” doesn’t mean “actually hacked,” but of course, since they didn’t report it, there was no timely investigation, so we don’t really know what happened, or even whether her server setup and/or server adminis-trator were sophisticated enough to de-tect a penetration if one had taken place.

This is the most profoundly amazing part of the whole story: Clinton’s server administrator was hired by State as a political appointee, from which position he continued to provide support to Clin-ton’s private e-mail server during work-ing hours, without telling anyone this was happening: The DCIO and CIO, who prepared and approved the senior advi-sor’s annual evaluations, believed that the senior advisor’s job functions were limited to supporting mobile comput-ing issues across the entire department. They told OIG that, while they were aware that the senior advisor had provided IT support to the Clinton Presidential cam-paign, they did not know he was providing ongoing support to the secretary’s e-mail system during working hours. They also told OIG that they questioned whether he could support a private client during work hours, given his capacity as a full-time government employee.

Clinton apparently paid him for the work, but it is basically impossible to believe that she  didn’t know this was happening (if her e-mail malfunctioned during the workday, did she expect to wait until 8 or 9 that night for it to come back up?) or that she thought it was okay to hire your private-server administrator as a political appointee (a diplomatic po-litical appointee in the IT department?) and then have him keep an eye on your private server from his government of-fice. This has an unpleasant whiff of Tammany Hall about it.

It’s really hard to come away from reading this report thinking “Yup, just an honest mistake.” Or indeed, “just a mistake, no big deal.” Or even “no worse than others have done.” I worked in bank IT for several years before I went to business school, and when this story first broke, I enjoyed an amusing hour or so envisioning what regulators would have said if we’d tried any of these sorts of excuses on them. Since then, I’ve had several such conversations with folks who are still laboring in the trenches of the securities industry, and their bitter laughter still rings in my ears. Why is Clinton being held to a lower standard?

Well, because she’s a Clinton, and the Clintons have always acted as if the rules applied only to others. And given that Democrats boxed themselves into her name on the ticket so early on, Team Blue had little choice but to rally around and pretend that this is just a minor peccadillo, like forgetting to date the signature on your FEC filings. Lord knows, this election cycle, there’s good reason to view this sort of behavior as the lesser of two evils.

Shampoo, not religion, is the true opiate of the masses

A WEEK ago today I brought a medium-sized shampoo for the three helpers/caregivers at home. There are three women all employed to attend to and be with my 90-year-old mother.

Two of them stay with her in the room, one does the cooking and laundry, while the other is with my mother. The third reports at night when I leave for Manila or some place, and all three of them are asked to stay with my mother.

her husband, although he comes riding to our home on a borrowed motorcycle, according to the morn-ing caregiver, to threaten that he will leave her forever or love her for eternity. The night caregiver just looks at them and thinks of the night differential.

A week ago the shampoo arrived. They were very happy, I sense a lilt in their voices. They are happy to smell, finally, a flower-based shampoo, not my shampoo, which smells of leather and apple, the kind of scent that is determinedly chauvinistic.

I did a cost-benefit analysis of my shampoo policy and concluded that to treat the caregivers to cake and soda each day would be more expensive. The shampoo has a dif-ferent effect altogether on them.

They walk now with confidence, flicking their long hair as if there is forever, well, at least in their scent. They have, it seems, forgotten their erring partners. The morning car-egiver has become extra friendly, sweet, to the cab driver who picks me up daily. The night caregiver has become an excellent one, combing my mother’s hair and treating her to lotion massage. The cooking car-egiver is pregnant.

Presently, I also walk with a restored masculine gait. My head is supremely different from them women. Structured inequality is restored.

Shampoo as equity is brilliant. I think I can be a politician.

E-mail: [email protected].

My mother grew up in a house with extended household. Now that she fears she is going to go soon, she needs to be surrounded by people. These three women com-pose a people.

We share the bathroom and toi-let on the ground floor. For a month now, I realized all of our heads and hair smell the same. I came to the conclusion that they have been us-ing my shampoo, as well.

There is another woman in the house, the nanny of my grand-daughter by my nephew. Except for the night caregiver, who is a widow, all of them are battered women. They spend whatever surplus they have for the month, buying load for their mobile phone. The two caregivers constantly send “text messages” or SMS to their respec-tive husbands. I eavesdrop or gossip with them and I am able to find out the dynamics of each relationship. The morning caregiver has given

up on her husband, although she still talks to him because “he is the father of my children.” The cook-ing caregiver has also given up on

THE leader of Europe’s finance ministers called Wednesday’s agreement  on Greek debt a

“major breakthrough.” In a way, it was. The latest twist in this perpet-ual negotiation has raised the art of dithering to impressive new heights.  

The next financing crunch, which would otherwise have come this summer, has been staved off: Greece will get money to last it at least until October. To make this possible and maintain a show of co-mity, its official creditors have ven-tured various semicommitments and vague understandings. But they left basic disagreements—mainly between Germany and the Interna-

tional Monetary Fund (IMF)—un-resolved. This epic of mismanage-ment is set to drag on.

Recently, and in increasingly stri-dent terms, the IMF has called on Europe to commit to additional debt relief, whether by haircuts, caps on interest rates, extended maturities or a repayment moratorium. It has argued—correctly—that Greece’s debts aren’t supportable otherwise, even with the maximum feasible effort on the Greek side to achieve budget discipline. The new deal ac-knowledges this position by stating long-term targets for the debt-fi-nancing burden Greece will have to carry. What it fails to do is say how

those targets might actually be met.The leader of the finance minis-

ters, Jeroen Dijsselbloem, reportedly said the scale of further relief (if any) would be “made to fit” the require-ments of debt sustainability. But what debt sustainability requires of Greece on one side and its credi-tors on the other has been the chief bone of contention throughout. Eu-rope is no closer to answering the core question.

Germany’s finance minister, Wolfgang Schaeuble, has mainly wanted to avoid decisions on easing Greece’s debt burden any further be-fore its current bailout program ends in 2018, despite the IMF’s advice to

the contrary. In addition, the finance ministers have been insisting up to now that Greece achieves and main-tains a primary budget surplus of 3.5 percent of national income—a target that the IMF calls undesirable and in any case unreachable. On both points, stasis has prevailed.

The deal avoids an immediate fi-nancial crisis, which is something, no doubt. It doesn’t actually preclude the measures, including further debt relief, that will sooner or later be needed to put the Greek economy back on a stable footing. But it’s a breakthrough with European charac-teristics—one that settles nothing.

Bloomberg View

Europe’s pointless ‘breakthrough’ on Greece

WOMEN STEPPING UPNiña Terol

BLOOMBERG VIEWMegan McArdle

A12

2ndFront PageBusinessMirror

www.businessmirror.com.ph

2Friday, May 27, 2016

Rating firm citesbanking sector’slasting problems A

But with just eight months left in o�ce and presidential candidates Hillary Clinton, Donald Trump and Bernie Sanders all against the deal, Obama and his advisers appear to have concluded that they must speed up that lengthy process to preserve the trade pact. “In this case, we’ve decided to accelerate that,” US Trade Rep-resentative Mike Froman said. “In consultation with Congress, we are already working with the countries in the region on the various steps that they’ll need to take to bring themselves into com-pliance with TPP.” He cited Vietnam as an exam-ple, saying US o�cials have trav-eled to the country over the last couple of months to discuss its obligations under the deal. TPP would create the world’s largest free-trade zone, deepening eco-nomic ties between the US and fellow signatories, including Can-ada, Mexico, Japan, Australia and Singapore. �e administration says it would eventually eliminate more than 18,000 tari�s that other na-tions impose on American imports, such as textiles, chemical goods, fruit, beef, and wine and beer. Last week’s release of an in-dependent report analyzing TPP’s economic impact on the US cleared the way for Congress to begin formal consideration of the �nal agreement. �e White House says it is in regular consultation with congressional leaders about the best legislative strategy going forward, and wants to see it ap-proved as soon as possible. But both Democratic and Republican leaders in Congress have said they are reluctant to bring the mea-sure to a vote during the heat of a presidential campaign in which the three remaining presidential con-tenders are avowed opponents. �e White House says neither the US nor the other signatories are willing to reopen the agree-ment to make changes that might bring additional political support here. But by beginning the imple-mentation work with countries like Vietnam, they can take steps that could help make wary mem-bers of Congress more con�dent that US partners will abide by the terms of the agreement reached last fall. MCT

A

contract with a power-generation company.  SMC applied for 38 PSAs for approval.    �e dates of applica-tions were �led on April 4 and April 29.    Of the 38 applications, seven were denied.  �e seven PSAs applications that were not approved are as follows: First Laguna Electric Co-operative Inc. with Limay Power Plant Corp.; Pampanga Rural Electric Service Cooperative with Mariveles Power Generation Corp. (MPGC); Pampanga Electric Co-operative I with MPGC; Panga-sinan Electric Cooperative and SMC Consolidated Power Corp.; Camarines Sur Electric Coopera-tive Inc. II and San Miguel Energy Corp. (SMEC); Nueva Ecija Electric Cooperative Inc. with MPGC; and Central Pangasinan Electric Coop-erative Inc. with SMEC.  In an interview, ERC Spokes-

person Floresinda Digal said the seven PSA applications failed to comply with the pre�ling require-ments of the law and ERC rules.  “Per information given by the technical working group, those ap-plications not accepted failed to comply with the pre�ling require-ment under Epira [Electric Power Industry Reform Act] to provide copy of application to the legisla-tive body of the local government unit concerned,” she said.  Other applications were re-jected for incorrect publication, re-quired a�davits were not covered by appropriate board resolution,” Digal said.  Meanwhile, the 31 approved PSAs are as follows:  n MPGC with Cebu Electric Cooperative I, Manila Electric Co., Cebeco II, Tarlac Electric Coopera-tive I, Aurora Electric Cooperative Inc. and Pelco II.

n SCPC with Tarelco I, Ilocos Sur Electric Cooperative Inc. and

Panelco II.n San Miguel Consolidated

Power Corp. with North Cotabato Electric Cooperative, Surigao del Sur Electric Cooperative II, Zam-boanga Electric Cooperative, Co-telco-PPalma (Pigcawayan, Pikit, Alamada, Libungan, Midsayap and Aleosan), Davao del Norte Electric Cooperative, Davao del Sur Electric Cooperative, Siargao Electric Cooperative, Lanao del Norte Electric Cooperative, Misa-mis Oriental Electric Cooperative I, Agusan del Sur Electric Coopera-tive and Zamboanga del Sur Elec-tric Cooperative.

n SMEC with Panelco II, Ilocos Sur Electric Cooperative, Iseco I, Is-eco II, Nueva Vizcaya Electric Coop-erative, Casureco II and Panelco.

n LPPC with Casureco I, Meral-co, Casureco II and Isabela Electric Cooperative II.

�e commission, in its Octo-ber 20, 2015, resolution, imple-mented the mandatory implemen-

tation of the CSP in November last year. However, the commission was swamped with requests for exemption from CSP supply con-tracting while others asked the ERC to defer implementation.

�is prompted the commis-sion to issue an amended resolu-tion, which e�ectively moved the start of the CSP implementation on April 30.

All PSAs executed on or after the said date shall be required, with-out exception, to comply with the provision of the CSP Resolution.

PSAs approved by the ERC or �led with the commission before the e�ectivity of the resolution may have one automatic renewal or extension for a period not ex-ceeding one year from the end of their respective terms.

�e ERC made it clear auto-matic renewal clauses or exten-sions of PSAs shall no longer be permitted upon e�ectivity of the resolution.

ERC okays 31 PSAs submittedby SMC’s power subsidiaries

A

Speaking to Creba members during the association’s monthly meeting  on �ursday, National Chairman Charlie A.V. Gorayeb underscored the need for Aquino to sign the bill into law to encour-age  more developers to ramp up housing production.  �e measure, Gorayeb said, will allow the real-estate indus-try to respond better to the rising backlog in housing, estimated to be already at 6 million units this year. “Early this week, we were in-formed that amendments to Re-public Act [RA] 7279 were rati�ed and it only needs to be enrolled to Congress to be part of its data bank, and be brought to Malaca-ñang for signature. Hopefully, be-fore Mr. Aquino steps down, this will be signed into law,” Gorayeb said in his speech.  RA 7279 directs subdivision-project developers to build social-ized housing equivalent to either 20 percent of the total project area, or the cost of their main developments, with a joint-venture partner. Socialized-housing projects ca-ter to the underprivileged sector of the society.  Creba tried its best to have the 20-percent requirement eased to 15 percent, and was able to convince Congress of the need to amend the bill. “�e 20 percent [require-ment] is not a guarantee that the developer will allocate, because that’s just like tax, when it is too high, it is prohibitive,” he told the BusinessMirror on the sidelines of the event. �e 15-percent requirements in the Congress-approved “Bal-anced Housing Development Pro-gram Amendments” bill is easier to comply with, he added. “Even if the percentage is de-creased to 15 percent, there will be an increase in terms of producing units,” Gorayeb reasoned.  �e Creba national chairman said the easier requirement will be encour-aging enough to entice more develop-ments, especially with the inclusion of condominium developers in the social-ized-housing requirement. �e amendments mandate condominium developers to allo-cate 5 percent of their projects for socialized housing.

P-Noy urged to ink billamending housing act

“We were able to convince the senators and congressmen not to impose the 20-percent allocation for condominium development, and they acceded to just impose 5 percent of the gross �oor area; that is a relief for condominium devel-opers,” Gorayeb added. 

An added feature of the amendatory bill allows the con-struction of medium-rise condo-miniums in urban areas, putting a�ordable housing units closer to the workplace of low-income ur-ban workers. 

Notably, under the proposed legislation, medium-rise condo-minium development will now be accorded the same tax exemptions and �scal bene�ts presently given to subdivision projects—an added encouragement for developers to produce more housing units. 

�e proposed bill is part of Creba’s �ve-point agenda bared last year. �e blueprint advocates several bills to achieve the group’s objectives, but revolves around three general principles: �nancing, land and governance. 

�e �ve-point agenda con-sists of the following: long-term and a�ordable funds for social-ized and economic housing; af-fordable homes for employees in urban areas; lands for residential, commercial and industrial devel-opments; e�cient local govern-ment housing regulations; and full-�edged housing and urban-development department.

GORAYEB: “The 20 percent [requirement] is not a guarantee that the developer will allocate, because that’s just like tax, when it is too high, it is prohibitive.”

IT’S NOW OR NEVER FOR TPP AS OBAMA SUCCESSORS NIX IT

B B C @bcuaresmaBM

LOWINCOME levels, high credit risks and the limited legal protection for regulators proved

to be lingering constraints to the local banking system despite its comparable strength among financial industry players in Asia, an international credit watcher said.

entire economy—is linked to the country’s infrastructure problem.

“Our assessment of economic risk in the Philippines re�ects the country’s low income level and in-adequate infrastructure, which to-gether hamper economic diversi�ca-tion and growth,” S&P said.

“Without the closure of infra-structure gaps and improvements in the business climate through regu-latory reforms, the Philippines may not achieve lower-middle-income status in 2017, where per-capita GDP [gross domestic product] ex-ceeds $3,000,” it added.

Meanwhile, the banking indus-try inherently faces high credit risk as a result of weak payment culture and rule-of-law status in the coun-try, according to S&P.

“�e Philippines’s payment cul-ture and rule of law are weak, and this has resulted in low e�ciency in the legal system, and caused signi�-cant delays and uncertainty in the recovery of bad loans,” S&P said.

“As per the World Bank’s ‘Doing Business Report 2016,’ the average time taken to resolve insolvency in the Philippines is 2.7 years and the recovery rate is 21.4 percent. Most of its peers have a better recovery rate, due to the shorter time taken in resolving insolvencies,” it added.

While regulations for banks are broadly in line with interna-tional standards, S&P said inad-equate legislation and legal protec-tion for supervisory sta� weaken the regulator’s ability to imple-ment prudential measures.

“Despite adequate regulation, we view the Philippines’s regulatory track record as weak. �e legal pro-tection o�ered to supervisory sta� when performing their duties is in-adequate, and this has undermined the implementation of prudent policies and measures. Speci�cally, supervisors are civilly liable if they have not applied ‘extraordinary dili-gence,’ an onerous requirement, in our view. Although the government is taking steps to amend the BSP [Bangko Sentral ng Pilipinas] char-ter to strengthen the central bank’s supervisory powers, this has been a protracted process,” S&P said.

“�e Philippines’s payment culture and rule of law are weak, and this

has resulted in low efficiency in the legal system, and caused significant delays and uncertainty in the recovery of bad loans.”—S&P

In its latest Philippine Banking Industry Risk Assessment, Standard and Poor’s (S&P) pointed out these three weaknesses in the country’s banking system must be improved to enable the country’s �nancial ser-vices to have a stronger foothold.

�e rating �rm identi�ed the low-income level of the country despite its strong economic per-

formances in recent years as one of the system’s weaknesses.

“�e Philippines’s low income level remains a key constraint to its economic resilience despite a prosperous economy,” S&P said.

�e economy’s failure to dis-tribute growth—which has been tagged as a fault not only for the banking system but also for the

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