Businessmirror september 28, 2015

Lead tax-reform proponents at the House of Representatives and the Senate said the Department of Finance (DOF) is reconsidering the tax-reform proposals advanced by the legislative leaders. House Committee on Ways and M eans Chairman and Liberal Party Rep. Romero S. Quimbo of Marikina City and Senate Committee on Ways and Means Chairman Sen. Juan Edgardo M. Angara said legislators now wait for word from the DOF on the tax-reform measures. “The DOF was tasked to study further [the

measure reducing the individual and corporate tax rates, and assess their] impact,” Quimbo said. Previously, the DOF warned law-makers that reducing the individual income and corporate tax rates will cause the government to lose tax revenues equal to 1.5 percent of the country’s gross domestic product (GDP), or P30 billion. This was why Malacañang, taking the cue from the DOF, rejected the long-pending bill man-dating adjustments in individual

www.businessmirror.com.ph n Thursday 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 6 sections 36 pages | 7 days a weekn Monday, september 28, 2015 Vol. 10 No. 354

A broader look at today’s businessBusinessMirrorthree-time

rotary club of manila journalism awardee2006, 2010, 2012u.n. media award 2008

See “Tax-reform,” A2

See “Meralco,” A2

Peso exchange rates n us 46.7380 n jaPan 0.3887 n uK 71.2568 n hK 6.0310 n china 7.3212 n singaPore 32.7802 n australia 32.7871 n eu 52.2624 n saudi arabia 12.4628 Source: BSP (24 September 2015)

Palace softens stanceon tax-reform proposals Reyes: “we

are looking to complete our

40,000 rollout by the end of the

year. This was the allocation

given to us by the energy

Regulatory Commission.”

special report

iNsiDe

www.businessmirror.com.ph Monday, September 28, 2015BusinessMirror E 1

© 2013 Harvard Business School Publishing Corp. (Distributed by The New York Times Syndicate)

By Joseph Grenny

R enowned restaurateur dan-ny Meyer likes to tell newly promoted supervisors that

they have just been given the “gift of fire.” As a boss they now have a new and potent power, but Meyer wants to ensure they understand the ap-propriate—and inappropriate—uses of this gift. Fire, Meyer explains, can be used to warm and comfort. It can be used to illuminate darkness. And every once in a while, it is used to scorch—as when a leader speaks painful truths to others.

I’ve met many newly minted su-pervisors, first-time Ceos and even recently elected political leaders—some of whom were ambivalent about taking on a new position. Here is some counsel on what to consider before you make the leap to manager:

Count the cost. It’s fun to play on a bigger stage. More salary is nice. Taking on more complex problems

provides new satisfactions. And learning to lead people is a novel opportunity for growth. But think about your future before you give up the present. The deepest regrets I’ve heard from those who took the job were the loss of:n Tribe. when you become the boss

your peers are no longer peers. This might unsettle valued friendships. when you are granted more power, you are implicitly agreeing that your loyalty is expected to be more to the en-terprise than to your colleagues. Could you dismiss one of your former peers? Are you willing to embrace fully the requirements of this new authority?n Simplicity. As a manager, you

will encounter a new set of trade-offs. when you take the job, you leave a world of value simplicity and enter one of value complexity. Because you are now a part of a management team, you will have to advocate positions with which you may not totally agree. Are you ready for that?

Take counsel from your fears. If you’re worried about failure or criticism, that’s normal. But faking confidence doesn’t work. Authen-ticity—first with yourself and then with others—is the path to legiti-mate serenity. Acknowledge your deficiencies without dwelling on them. Then focus on your strengths.

Check your motive. If you want power to gratify your ambition, your leadership will be all about you. You’ll fail to cultivate the legitimate trust of your team. You’ll guard your power jealously rather than being generous with it. That will hobble your capacity to be bold and decisive. danny Meyer says that the gift of fire isn’t “power over” it is “power to.” Leadership offers profound satisfactions—but only if undertaken fully, willingly and for the right reasons.

Joseph Grenny is a social scientist for business performance and the cofounder of VitalSmarts.

How to Spot Hidden opportunitieS

for SaleS GrowtHThe best answers frequently

come from looking at differences in performance, sales activity and market potential across different parts of the business. Better ana-lytics enable companies to discover and take advantage of these hidden pockets of growth.

Here are several examples:

Novartis gets more out of its average performers. T he globa l health-care company identified salespeople who were outstand-ing performers and isolated a set of the behaviors that set that group apart from average performers. The company devel-oped a new sales process based on these behaviors. In a study, newly trained sales-people realized twice the growth

rate in sales when compared to a control group.

A manufacturing company ac-celerates growth among new hires. The company tracked perfor-mance of salespeople over their first 20 months with the company to understand how quickly new salespeople became effective, and why. A key finding was that sales-people reporting to top-perform-ing first-line managers performed much better than salespeople working with average-performing front-liners. The difference? Top-performing managers spent more time coaching in the field and ar-ranged for mentorship from ex-perienced team members. So the company established new coach-ing expectations for front-line

managers and implemented a track-ing system to ensure accountability.

A telecom company gets more business from its high potential customers. The company found “data doubles” for low-performing, high-potential customers—i.e., other customers who had a simi-lar demographic profile but were buying much more. The company analyzed the purchase patterns and sales strategies at these more-successful accounts and shared the insights with the sales force. That information enabled salespeople to improve targeting the right prod-ucts for underperforming customer accounts, thus, dramatically boost-ing sales opportunities.

Companies w i l l a lways be thinking about their next source of growth. Today’s world of big data enables companies to ana-lyze sales force data for new and better sources of insight.

Andris A. Zoltners is a professor emeritus of marketing at Northwestern University’s Kellogg School of Management. He and PK Sinha are cofounders of ZS Associates. To-gether with Sally Lorimer, they are the authors of The Power of Sales Analytics.

By Victor Lipman

STreSS and I have had a long, complicated relationship. early in my career, it often

felt like my naturally lower-stress, quiet management style was an im-pediment to advancement. (I even-tually worked in management for more than two decades and became a vice president.)

over my decades in business I’ve often observed a similar dynamic: Classic high-octane Type A’s (ag-gressive, impatient, with high stress levels) most often ended up with top leadership roles, while extremely capable Type B’s (calm, patient, more relaxed) ended up in lesser positions. In assessing tal-ent, we tend to default to a more predictable model of high-stress, high-intensity leadership. There are two big problems with this:

n Unchecked Type A behavior creates a persistently stressful en-vironment for the team. It’s a rec-ipe for employee disengagement. we all know Type A, high-intensity managers who can be counted on to deliver a tough project, but leave a trail of bodies in their wake. Ul-timately that’s not an efficient long-term model. A chronically stress-packed management style breeds burnout and turnover. The best management is sustainable. Stress isn’t. The simple fact is that people don’t do their best work while anxious.n Many potentially excellent

Type B managers are overlooked because they haven’t earned their stress merit badge. This can frus-trate talented individuals. out-standing managers aren’t exactly in such abundant supply that we can afford to needlessly limit the pool.

Most of us, of course, aren’t exclu-sively Type A or Type B personalities but possess elements of both. we can consciously cultivate calm and lower the A volume while turning up the inner B.

doing so brings changes that are both physical and emotional. The beneficial effects have been well documented since the 1950s. There’s a ripple effect: More relaxed behavior can yield improved leader-ship results.

when backed by a solid commit-ment to quality and excellence, and supported by motivated employees who appreciate less stress in their working lives, Type B’s can be highly productive leaders.

Victor Lipman is author of The Type B Manager: Leading Successfully in a Type A world. He has his own consulting firm, Howling Wolf Management Training.

All boards need a technology expertBy Jean-Louis Bravard

R eCenTLY I examined the professional experience of nonexecutive directors at the

major banks in Britain. Like almost every other major industry today, banking relies on complex and ex-pensive technology. So I was curious whether the individuals charged with corporate governance had any more than a layman’s knowledge of information technology (IT). I discovered that only one bank had a board member with some direct experience in technology.

This is typical not only in banking but also in most major industries. Technology is the most important agent of change today; hardly any industry is im-mune to both its value-creating and disruptive potential. Yet the nonexecutive directors lack the experience required to challenge and support chairmen and Ceos in bringing the best technology to their business.

Many industries today still

employ outdated technology. of-ten, only a multiyear, board-level sponsored effort can ensure a re-sponsible IT overhaul. But without IT expertise at the director level, how can a board make educated decisions and take advantage of rapidly changing technology and consumer behavior?

To ensure that corporate gover-nance includes sufficient oversight of technology, I propose that companies follow these principles:

Add a technology expert to your board. Give priority to individuals who continue to be involved with technology. Technology moves too fast for stale talent, however well-regarded. Be prepared to rotate this role at least every two years.

Don’t rely on advisers. Many boards rely on technical advisers and consultants to assess their firm’s technology needs. Too often their advice is too generic.

Ask tough questions about technology spending<strong>.</strong> Chief information officers are often not rewarded for taking

out old code and old hardware; in-stead they “layer” old technology on top of ancient technology, bad on top of worse—which leaves their company vulnerable to new compa-nies that don’t have any obsolete inheritances to handle.

Understand cyber threats. Unfortunately, new technology opens up vulnerabilities even as it creates value. Total security is not possible, but understanding the risk-benefit trade-off is essen-tial. A recent survey found that 80 percent of boards do not even re-ceive briefings on their company’s cybersecurity strategy. Briefings should happen periodically.

Chairmen should test their company’s preparedness to handle technological change by mapping current and future challenges for their current nonexecutive direc-tors. They will almost surely dis-cover a gap between their team and the company’s needs.

Jean-Louis Bravard is a nonexecutive board member for London and Partners.

Are you sure you want to be a manager?To reduce stress, embrace your inner type B

By Andris A. Zoltners, PK Sinha & Sally E. Lorimer

In the hunt for growth, every sales leader, whether new or seasoned, faces the same question. Where will

the growth come from?

BusinessMirrorPerspective

Monday, September 28, 2015E4 www.businessmirror.com.ph

Now, factories are rapidly re-placing those workers with auto-mation, a pivot that’s encouraged by rising wages and new o� cial directives aimed at helping the country move away from low-cost manufacturing as the supply of young, pliant workers shrinks. It’s part of a broader over-haul of the economy as China seeks to vault into the ranks of wealthy nations. But it comes as the country’s growth slows amid tepid global demand that’s add-ing pressure on tens of thousands of manufacturers. With costs rising and pro� ts shrinking, Chinese manufacturers “will all need to face the fact that only by successfully transitioning from the current labor-oriented mode to more automated manufac-turing will they be able to survive in the next few years,” said Jan Zhang, an automation expert at IHS Technology in Shanghai. Shenzhen Rapoo Technol-ogy Co. is among the companies at ground zero of this transformation. At its factory in the southern Chi-nese industrial boomtown of Shen-

zhen, orange robot arms work along-side human operators assembling computer mice and keyboards. “What we are doing here is a revolution” in Chinese manufac-turing, said Pboll Deng, Rapoo’s deputy general manager. � e company began its push into automation � ve years ago. Rapoo installed 80 robots made by Sweden’s ABB Ltd. to assemble mice, keyboards and their sub-components. � e robots allowed the company to save $1.6 million each year and trim its workforce to less than 1,000 from a peak of more than 3,000 in 2010. Such upgrading underscores the grand plans China’s communist leaders have for industrial robot-ics. President Xi Jinping called in a speech last year for a “robot revolu-tion” in a nod to automation’s vital role in raising productivity. Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial auto-mation as well as development of a homegrown robotics industry. Some provinces have set up

their own “Man for Machine” pro-grams aimed at replacing workers with robots. Guangdong, a manufacturing heartland in southern China, said in March it would invest 943 billion yuan ($148 billion) to encourage nearly 2,000 large manufacturers to buy robots, the o� cial Xinhua news agency reported. Guangzhou, the provincial capital, aims to have 80 percent of manufacturing auto-mated by 2020. A relentless surge in wages is adding impetus to the automa-tion revolution. China relied on a seemingly endless supply of cheap labor for decades to power its economic expansion. � at equa-tion is changing as the country’s working-age population stops growing and more Chinese grad-uate from university, resulting in a dwindling supply of unskilled workers, annual double-digit per-centage increases in the minimum wage and rising labor unrest. Deng said Rapoo’s wage bill rising 15 percent to 20 percent a year was one big factor driving its use of robots.

“Frontline workers, their turn-over rate is really high. More and more people are unwilling to do repetitive jobs. So these two issues put the manufacturing industry in China under huge pressure,” he said. China’s auto industry was the trailblazer for automation, but other industries are rapidly adopt-ing the technology as robots be-come smaller, cheaper and easier to use. It now only takes on average 1.3 years for an industrial robot in China to pay back its investment, down from 11.8 years in 2008, ac-cording to Goldman Sachs. Companies such as electronics maker TCL Corp. are using robots to produce higher-value goods. At one factory in Shenzhen, TCL uses 978 machines to produce � at-screen TV panels. At another TCL plant in Hefei, near Shanghai, steel refrigerator frames are bent into shape before being plucked by a blue Yasakawa robot arm that stacks them in neat rows for fur-ther assembly. Fridges and big washing ma-chines have heavy internal compo-nents, so “if you use automated ro-bots to make them, they also let you cut your labor intensity by a lot,” said TCL Chairman Tomson Li. China held the title of the world’s biggest market for indus-trial robots for the second straight year in 2014, with sales rising by more than half to 56,000, out of a total of 224,000 sold globally, ac-cording to the International Fed-eration of Robotics. � ere’s plenty more room for explosive sales growth. China has about 30 robots for every 10,000 factory workers compared with 437 in South Korea and 152 in the

United States. � e global average is 62. Beijing wants China’s number to rise to 100 by 2020. � e switch to robots has raised fears that it will contribute to slow-ing job though there are few signs that’s happening yet. Deng said Rapoo hasn’t had to resort to layo� s. Rather, the com-pany is just not replacing workers who quit. “It’s not simply replacing the operation of workers by robot. We do more than that. We are mak-ing a robot platform” in which humans and machines work to-gether to make production more � exible, he said. On a recent tour of Rapoo’s factory, Deng pointed out the e� -ciencies. As a conveyor belt carried cir-cuit boards out of an industrial soldering machine, a robot arm removed them from metal jigs and placed them on another belt. Hu-man workers typically do this job in other factories, Deng said, but turnover is high because of the heat and repetitiveness. In a glass-walled room, robots assembled receivers for wireless mice, tasks that were previously done by 26 people, Deng said. Now, one or two humans supervise as a laser automatically fuses shut metal USB plug housings, four at a time, while steps away, robot arms slide the plugs into plastic sleeves. Automation means “accuracy can still remain very high and there are seldom failures for the robots,” said Deng. Boosting quality also helps China’s companies achieve another national goal of shedding their rep-utation as shoddy, low cost produc-

ers to compete with global rivals. Automation will allow Chi-nese factories to grab a bigger share of industries where accura-cy and precision are crucial, such as aerospace, medical devices and optical components, said Derick Louie, of the Hong Kong Produc-tivity Council. Makers of toys and other low-pro� t consumer goods, how-ever, “probably will have to move outside of China due to rising labor costs and environmental taxation,” he said.

ROBOT REVOLUTION SWEEPS CHINA’S FACTORY FLOORS

B K C | � e Associated Press

SHENZHEN, China—In China’s factories, the robots are rising For decades, manufacturers employed waves of young migrant workers from China’s countryside to work at countless factories in coastal

provinces, churning out cheap toys, clothing and electronics that helped power the country’s economic ascent.

WORKERS assemble parts next to robot arms at an auto-parts manufacturing factory in Dafeng city in east China’s Jiangsu province. CHINATOPIX VIA AP

Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial automation, as well as development of a homegrown robotics industry.PeRsPeCTIVe e4

sales growth

china’s robot revolution

MONday MORNING e1

more meralcocustomersseen shiftingto PrePaid

BusinessMirrormedia partner

ePira amendment no Panacea for Power crisis, rate increases

UMalI: “For now, it is

already just wishful

thinking.”

By Lenie Lectura

First of three parts

THE lawmaker who earnestly fought to have the 14-year- old Electric Power Industry Re-

form Act (Epira) amended has given up, saying that it was just, after all, “wishful thinking.” House Committee on Energy

Chairman and Liberal Party Rep. Reynaldo V. Umali of Oriental Mindoro—who was one of the speakers at a recent forum on “Why Energy Efficiency is Every-one’s Business”—said he tried, in many ways, to amend the Epira, but “there was too many who are against it.” “I tried hard to amend the Epira

through House Bill (HB) 4479. Initial-ly, I was hopeful of amending it during the 16th Congress, but it hasn’t hap-pened yet. For now, it is already just wishful thinking that amendments to the law will be passed,” Umali said in an interview. Among others, Umali’s HB 4479 seeks the following:

Continued on A2

By Jovee Marie N. dela Cruz

LegisLators bared on sunday a softening of the hardline stance Malacañang has taken against the proposal to scale back

the country’s income-tax structure, saying that fiscal policy-makers—who earlier put their collective foot down on reducing the personal and corporate income-tax rates—agreed to take a fresh look at the reform measures.

POWER distributor Manila Elec-tric Co. (Meralco) said its target of migrating at least 40,000

customers to its prepaid retail services by year-end is “doable,” thanks to the positive feedback of early shifters, ac-cording to its president. Meralco President Oscar S. Reyes said his company is looking to maxi-mize the meter allocation granted by the Energy Regulatory Commission (ERC) on or before end-December. “The feedback is very good. Customers really find value to it, and we are looking to bring this ex-perience to a lot more customers,” Reyes told the BusinessMirror in a chance interview. The utility firm was given the green light to roll out 40,000 electric-ity meters, which Meralco wants to finish by end of the year, at the latest. “We are looking to complete our 40,000 rollout by the end of the year. This was the allocation given to us by the ERC,” Reyes said. There are about 12,000 prepaid electric-service customers in some parts of Manila, Cainta, Quezon City, San Juan, Caloocan, Pasig and Cavite. The prepaid service is being of-fered on a voluntary basis. To avail, a customer may go to any of Meralco’s business center and pay an initial consumable load of P200. Customers may purchase load in denominations of P100, P200, P300, P500 and P1,000. They will receive a top-up confirmation from their mobile phones. If existing Meralco subscribers want to shift to prepaid electricity, no meter charge will be collected from them. On a daily basis, pre-paid customers will receive a free

and corporate income-tax rates, saying the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.” But following several calls to scale back the individual and corporate tax rates, President Aquino last Thursday met with reform proponents Quimbo and Angara to convince the Executive on the merits of their reform proposals. According to Angara, he and Qui-mbo presented before President Aquino “various arguments and reasons for the reform, from the level of individual households at the microlevel and the benefits to society and the economy at large.” “We also emphasized that the real incomes of regular employees had been eroded since 1997 when the tax code was enacted into law,” Angara said. The Philippines owns the second-highest personal income-tax rate in the region at 32 percent, next to Thailand and Vietnam’s 35 percent, and the high-est value-added tax rate of 12 percent

as the country’s individual income-tax bracket has remained unchanged since 1997. The House version of the mea-sure seeks to recast the income tax for compensation-income earners, the self-employed and professionals, as well as corporations through simplification of tax tiers and rates while relating these to inflation. Under the bill, public and private workers earning P180,000 and below will be completely tax-exempt. In the current setup, those earning P10,000 or less per month pay 5-per-cent income tax. The bill also reduces the income-tax rate of those earning above P180,000 to P500,000 and above P500,000 to P10 million from the current 30 percent to 9 percent and 17 percent, respectively. It also provides that a 30-percent tax will be paid by those earning P10 million annually. Currently, those with yearly earnings of P500,000 and above pay 32-percent income tax. The measure will also reduce the corporate income-tax rate from 30 percent to 25 percent.

[email protected] BusinessMirrorMonday, September 28, 2015 A2

BMReports ■ Value-added tax (VAT) exemption of sales of electricity by generators and distribution units. ■ Full contracting of the distribution util-ity’s (DU) current and future energy and de-mand requirements from bilateral contracts, and requiring the DU’s contracts to undergo a bidding. ■ Suspension of Wholesale Electricity Spot Market in cases where the delivery and adequate supply of electricity maybe affected. ■ Reduction of threshold level of the Re-tail Competition and Open Access from 1 megawatt (MW) to 750 kiloWatts (kW) then to 500 kW. ■ The establishment of a one-stop-shop for processing of permits and licenses to en-sure the timely completion of power projects. ■ Creation of an independent Consumer Advocacy Office within the Energy Regulatory Commission (ERC) to protect consumer inter-

ests and, at the same time, increase the number of ERC commissioners, create three divisions and expand its organizational structure. ■ Exclusion of small-capacity generation companies of not more than 20 MW from the mandated 15-percent public equity listing requirement. ■ Disallowing cross-ownership. ■ Authorizing the President, through the energy secretary, upon recommendation of the Joint Congressional Power Commission, to establish additional generating capacity in times of crisis. ■ Nonprivatization of Agus-Pulangi hydropower plants to ensure power supply in Mindanao. Substitute measureBECAUSE there are only a few months left before the May 2016 elections, Umali said he decided to “unbundle” his bill. “I dissected my original bill into three or four bills. I disintegrated my bill amending

Epira into doable and passable bills in this Congress and hopefully address other issues some other time,” he said. An official of a DU firm, who asked anonymity, noted that “there is simply no time left to amend Epira during the present Congress. That’s why Congressman Umali has given up and decided that it is easier to come up with substitute bills that are less controversial.” The substitute bills, Umali said, are now going the rounds. The House Committee on Energy has recently approved a substitute measure amending Epira. The committee report of the substitute bill, or an act declar-ing power infrastructure projects as projects of national significance, amending certain provisions of Republic Act (RA) 9136, is now being prepared for presentation in the ple-nary for second reading. Among the salient points of the substitute bill include the following: ■ Ensure timely completion of power

projects for energy security and minimize costs by declaring power infrastructures as projects of national significance, imbued with public interest. ■ The substitute measure also inserted new section, which provides that the power of the President may, upon the certification and rec-ommendation of the energy secretary, classify certain power infrastructure projects, includ-ing but not limited to generation, transmission and distribution facilities, undertaken this act as projects of national significance which shall be entitled to the following incentives: ■ All real properties which are actually and directly used for the project will be ex-empted from any and all real-property taxes levied under RA 7160, or the local Govern-ment Code of 1991; ■ The sum of all local taxes imposed by a province, city or municipality pursu-ant to RA 7160, as amended, on the pro-ponent should not exceed 50 percent of 1 percent of the gross sales or receipts of

the preceding calendar year; and ■ The required business permits, includ-ing any renewals thereof, should have been deemed to have been automatically granted or issued to the winning project proponent upon tender of the required taxes and fees to the appropriate local government unit. The amendment will also include the proposal of Nacionalista Party Rep. Henry Oaminal of Misamis Occidental prohibiting the privatization of Agus-Pulangi hydro-electric power complex in Mindanao. When sought for comment, Department of En-ergy Officer in Charge Zenaida Monsada said harmonizing laws pertaining to the power sector could be a better approach than amending Epira. “Epira is huge. We have many other laws related to the power sector. What could be better perhaps is to look at how to harmonize these. Separately, it is also worth looking at how to improve further these other laws,” Monsada said in an interview. To be continued

Epira amendment no panacea for power crisis, rate increasesContinued from A1

LARGEST DISPLAY OF ORIGAMI LANTERNS Kevin Tan, Megaworld first vice president and head of commercial division, puts the last set of origami lanterns in a dragon-shaped display. The “Lantern of Hope” at Megaworld’s Lucky Chinatown mall in Binondo, Manila, broke the Guiness World Record for the largest display of origami lanterns. The dragon-shaped display was created to commemorate the Mid-Autumn Festival, a Chinese celebration marked by family reunions and the giving of mooncakes. NONIE REYES

text message informing them of their remaining prepaid amount. The customer will also receive a warning three days be-fore estimated depletion of load and disconnection. Based on its rules, customers will be allowed to experience the prepaid service on a trial basis for six months. Thereafter, they may continue to avail themselves of the service or revert to postpaid. Anticipating a huge demand for prepaid electricity service, Meralco asked the ERC to authorize another 100,000 meters for households in-terested in the service. Its application, however, is still pending with the agency. Meralco needs to file for approval of meter purchase and instal-lation before it can roll out the service across its franchise area. The utility allotted $7 million in 2012 for the deployment of the service, covering technical and

commercial tests, as well as the commercial rollout for the 40,000 meters. It tapped General Electric Co. as the system integrator for the advanced metering structure of the service; Orga Systems for billing op-erations, and Ecologic Analytics for the meter data-management system. The prepaid service offering will enable customers to budget their electricity consumption. The system also informs consum-ers if they need to reload imme-diately to avoid disconnection. Prepaid electricity is also being used in other countries such as Indonesia, Australia and New Zealand, Meralco said. Meralco distributes power in Metro Manila, Bulacan, Cavite and Rizal, as well as parts of Batangas, Laguna, Quezon and Pampanga. “We will see whether we can invite other distributors to also offer the prepaid service,” Reyes said. Lorenz S. Marasigan

UNITED NATIONS—China’s president on Saturday pledged billions in aid and said Beijing will for-give debts due this year in an effort to help the

world’s poorest nations, as world leaders begin to seek the trillions of dollars needed to help achieve sweeping new development goals. President Xi Jinping spoke at a global summit that on Friday launched the nonbinding goals for the next 15 years. Xi and others spoke as the UN gathering began to shift focus from development to the high-powered General Assembly meeting that begins on Monday with speeches by Xi, President Barack Obama, Russian President Vladimir Putin and Iranian President Hassan Rouhani on the first morning alone. Obama and Putin will meet on Monday. The prospects

for any meeting between Obama and Rouhani, even a handshake, remained unclear. Rouhani arrived on Saturday and immediately was en-couraged by UN Secretary-General Ban Ki-moon to have Iran step up to help achieve political settlements to the grinding conflicts in Syria and Yemen, where Iran has in-fluence. The Islamic republic is a top ally of the Syrian gov-ernment of President Bashar al- Assad and supports Shiite Houthi rebels who have held parts of Yemen for months. Iran’s president said in his address that the recent deal with world powers on its nuclear program “has created suitable conditions for regional and international coop-eration,” including on protecting the environment. As world leaders met quietly behind the scenes, oth-ers lined up to express support for the new development

push that aimed to eliminate both poverty and hunger over the next 15 years. They replace a soon-to-expire set of development goals whose limited success was largely due to China’s surge out of poverty over the past decade and a half. China’s president vowed to help other countries make the same transformation. Xi said China will commit an ini-tial $2 billion to establish an assistance fund to meet the post-2015 goals in areas such as education, health care and economic development. He said China would seek to increase the fund to $12 billion by 2030. And Xi said China would write off intergovernmental interest-free loans owed to China by the least-developed, small island nations and most heavily debt-burdened countries due this year. AP

By Ma. Stella F. ArnaldoSpecial to the BusinessMirror

FILIPINOS are one of the well-traveled groups in the world, and spend quite a

large amount in the destinations they visit. In the latest report of the United Nations World Tourism Organization (UNWTO), the Philippines was recognized as a source market “which showed double-digit growth in expen-diture,” ranking it behind Saudi Arabia, Norway, Sweden, Spain, India and Taiwan. In 2014 Filipinos spent $12 billion (P552 billion) in their travels abroad, up 54 percent from what they spent in 2013, as per the UNWTO report of August 2015. This bumps up the Philip-pines to 29th place in the list of top spending markets, from 31st place in 2013. The growth in ex-penditure was also larger than 2013, when Filipinos’ spending grew by some 20 percent. China was ranked as the fast-est-growing source market for tourists in 2014, as well as the world’s top spenders since 2012. “Chinese travelers spent a record $165 billion abroad in 2014—an exceptional 27-percent increase over 2013,” the report added. Following China, the oth-er top spenders were the US ($110.8 bi l l ion), Germany ($92.2 billion), the United King-dom ($58 billion), Russia Fed-eration ($50.4 billion), France ($48 billion), Canada ($34 bil-lion), Italy ($24 billion), Aus-tralia ($26.3 billion) and Brazil ($26 billion). In terms of outbound travel, UNWTO data sent to the Busi-nessMirror indicated that Fili-pinos traveled to the following countries last year: Hong Kong (634,744 Filipino tourists, but down 10 percent from 2013); Malaysia (618,538, up 11 per-cent); South Korea (434,951, up 8.6 percent); Macau (262,853, up 2.7 percent); Indonesia (235,248, up 2.7 percent); the US (219,632, up 9.5 percent); Japan (184,2014, up 70 percent); Russia (162,990, up 9.2 percent); Taiwan (136,978, up 37.4 per-cent); and Vietnam (103,403, up 3 percent). No data for 2014 were avail-able for Singapore, Thailand and Bahrain, which in previous years, recorded significant numbers of Filipino tourists. In the first half of the year, the Philippines ranked fourth in Southeast Asia in terms of growth in international tourist arrivals at 9 percent. It follows Thailand (up 30 percent), Myan-mar (up 17 percent in the first quarter 2015), and Lao PDR (up

13 percent). As a region, South-east Asia saw a 5-percent increase in tourist arrivals during the pe-riod January to June 2015,” the latest UNWTO World Tourism Barometer said. Total international tourist ar-rivals grew by 4 percent to 538 million, with Europe, Asia and the Pacific, and the Middle East all recording 5-percent growth in international arrivals, and the Americas, 4 percent. “Limited data available for Africa points to an estimated 6- percent decrease in the number of international tourists in the region” In spite of this overa l l growth, said the UNWTO, “re-sults by destination are rather mixed. Safety and security re-main a global concern while the economic scenario is compara-tively more volatile with the re-covery of advanced economies contrasting with the slowdown of emerging economies. Tour-ism demand has also been im-pacted by lower oil prices and currency fluctuations.” UNWTO Secretary-General Taleb Rifai said in a news state-ment: “These results show that, despite increased volatility, tour-ism continues to consolidate the positive performance it has had over the last five years and to pro-vide development and economic opportunities worldwide.” He added: “As UNWTO [meets] in Medellin, Colombia, for its 21st General Assembly, this is the appropriate moment to call for a stronger support to tourism as the sector has the potential to deliver on some of the most pressing challenges of our time, namely job creation, economic growth and social inclusion.” The UNWTO has projected the number of international tour-ist arrivals worldwide to rise by an average of 3.3 percent annu-ally, or 43 million a year, from 2010 to 2030. With these growth estimates, international tourist arrivals worldwide will likely hit 1.4 billion by 2020, and 1.8 bil-lion by 2030. “The strongest by region will be seen in Asia and the Pacific, where arrivals are forecast to increase by 331 million to reach 535 million in 2030 [up 4.9 per year],” the UNWTO stressed. Due to the region’s faster growth, Asia and the Pacific see its global market share in arrivals rise to 30 percent of total in 2030, from 22 percent in 2010. The United Nations has pro-claimed September 27 as World Tourism Day, recognizing the tourism industry’s importance in generating economic growth. 2015 marks the 35th year of the annual celebration.

PinoyS arE wEll-travElEd, big SPEndErS–Unwto rEPort

Meralco. . . Continued from A1

China vows billions of development dollars, debt forgiveness

Tax-reform. . . Continued from A1

BusinessMirror [email protected] A4

Economy

Sen. Juan edgardo “Sonny” Angara has sponsored a bill that seeks to institutionalize

and strengthen the government's support to overseas Filipino work-ers (OFWs) and their families by in-troducing reforms to the Overseas Workers Welfare Administration (Owwa) charter. Under the proposed measure, Owwa is declared as a national government agency and an at-tached agency of the Department of Labor and employment “vested with a special function of develop-ing and implementing welfare pro-grams and services that respond to the needs of its member-OFWs and their families.” Since 1980, Owwa is an inde-pendent financial agency that manages the Owwa Fund, or the welfare fund of overseas workers and provides services to its con-tributing members in the form of loans and insurance. It is entirely self-funded through the contributions of its members and receives no allocation from the national government. “Hindi lamang po pangongolekta ng kontribusyon ang gawain ng Owwa. Mandato po ng Owwa na tiyakin ang kaligtasan at kapakanan ng OFWs. Kaya ang sabi naman ng Department of Budget and Management [DBM] at ng Governance Commission, ang Owwa ay isang nGA, o national government agency at nararapat na pinopondohan ito ng gobyerno taun-taon[Owwa’s role is not limited to collection of contributions, but it is also mandated to assure the safety and wellbeing of OFWs. That’s why we told the DBM and the Manage-ment Governance Commission that Owwa is a government agency that should be funded by the government every year],” Angara said, acting chairman of the Senate Committee on Labor, employment and Human Resources Development. Angara’s bill also seeks to include the reitegration of OFWs as one of the core programs of Owwa, mandating that not less than 10 percent of the total collection will be used for the reintegration program every year. The bill further provides that the Owwa fund can only be used to exclusively serve the welfare of member-OFWs and their families, and ensures transparency in the utilization and management of the funds. “Kapag naisabatas ito, magkakaroon ng isang bagong Owwa na malinaw ang mandato at tunay na mapagkakati-walaan ng OFWs at maging ng buong bansa (“Once this bill becomes law, the new Owwa would have a clear mandate that the OFWs and even the whole country could truly trust),” Angara said. Recto Mercene

By Estrella Torres

B UDGeT watchdog Social Watch Philippines (SWP) has raised concern on the

presence of various lump sum ap-propriations “that can be used for election purposes” in the proposed P3.002 trillion national budget for 2016. Prof. Leonor Briones, former na-tional treasurer and SWP convener, said the 2016 proposed budget is marred with lump-sum appropria-tions, such as special purpose funds, unprogrammed funds and automatic appropriations, as well as Priority Development Assistance Fund- and Disbursement Acceleration Pro-gram-like allocations. She said the “overstatements, budget errata and redefinition of savings, remains a significant chal-lenge in exacting accountability in spending the national budget under a development framework. We call on the citizens to join us in keep-ing the 2016 budget under close scrutiny especially in light of the election season which has actually started this year.” Briones said despite the huge in-crease in budget allocation, reach-ing P10.34 trillion in the last five years, the government has been remiss in its commitment to reduce

poverty based on the Millennium Development Goals (MDGs). “The reckoning year of the MDGs shall conclude with alarming sce-narios given the government miss-ing its MDG poverty target of 17.2 percent by this year and its inability to achieve targets in 19 out of 28 in-dicators,” Briones said. She said the Alternative Budget Initiative has urged Congress to in-tervene in budget deliberations, so the government can fund appropri-ate programs and projects that can improve people’s lives. “We also want to ensure that the national budget will serve its purpose as an equalizer that ad-dresses inequality and socioeco-nomic problems tackled by the MDGs,” Briones said. She added: “Much is left to be de-sired in the 2016 proposed budget, which can be utilized for election spending purposes.” “As the national budget will reach the P3-trillion threshold for next year, we urge the House and Senate to consider and endorse civil society alternative budget proposals, which aim to finance the MDG drawbacks that have long hampered our pursuit toward sus-tainable development, reduction of inequality and eradication of extreme poverty,” she said.

H o u s e Committee on Appro-p r i at i o n s Chairman and Liberal Party Rep. Isidro Ung-ab of Davao sa id t h at the lower chamber’s plenary de-liberations

on House Bill 6312, or the pro-posed 2016 General Appropria-tions Act (GAA), will be conducted from Monday to Friday. “We will start plenary delib-erations tomorrow [Monday]. De-bates on the 2016 national budget will immediately follow after my sponsorship speech,” Ungab said on Sunday. According to Ungab, the 2016 GAA

will be signed into law by December. “We intend to approve the bud-get before the end of the year as what Congress has done in the past five years,” the lawmaker added. Ungab also assured that all lawmakers—allies and nonallies alike—will have a free and inde-pendent discussions on the pro-posed budget. “Hopefully, the plenary debates and voting on second reading of the national budget will have been done by the time that [certificates of candidacy filing from October 12 to 16] candidacies for the May 2016 elections are being filed,” Ungab said. The Development Budget Co-ordination Committee (DBCC), the interagency body that de-termines the overall economic targets, expenditure levels and budget of the government, is ex-pected to be present during the

Monday, September 28, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

first day of the plenary delibera-tions of the 2016 budget. Members of the DBCC are com-posed of Budget Secretary Floren-cio B. Abad as chairman; Director General Arsenio M. Balisacan of the national economic and Devel-opment Authority as cochairman; and executive Secretary Paquito n. Ochoa Jr., Finance Secretary Cesar V. Purisima and Bangko Sentral ng Pilipinas Amando M. Tetangco Jr. as members. earlier, Abad said the proposed budget for 2016—which is 15.2 percent higher than the P2.606- trillion 2015 national budget—is the Aquino administration’s blueprint for greater inclusive growth and reform expansion in the country. Based on allocation by sector, social services will have the biggest budget allocation of P1.1059 tril-lion, which is 36.8 percent of the proposed budget. It covers educa-tion, health-care housing and social welfare, and employment. economic services took the second-largest budget allocation with P829.6 billion, which is 27.64 percent of the proposed budget. Transport and communications infrastructure will get the bulk of this budget.

General Public Services will get P517.9 billion, debt burden P419.3 bil l ion, and interest payment P392.8 billion. Last, Defense will get P129.1 billion. This allocation will fund the Armed Forces of the Philip-pines modernization in light of the territorial disputes in the West Philippine Sea (South China Sea). By department al locations, the top 10 departments are the department of education, P435.9 billion; Public Works and High-ways, P394.5 billion; national Defense, P172.7 billion; Interior and Local Government, P154.5 billion; Health P128.4 billion; Social Welfare and Development, P104.2 billion; Agriculture, P93.4 billion; Finance, P55.3 billion; Transportation and Communica-tions, P49.3 billion; environment and natural Resources, P25.8 bil-lion; and of Science and Technol-ogy, P18.6 billion. Meanwhile, the minority bloc, particularly the Makabayan bloc, vowed to fully scrutinize the pro-posed 2016 budget. Party-list Rep. Terry Ridon of Kabataan said, “We fully prepared to interpellate the 2016 budget, particularly the lump sums lodged in different executive agencies.”

Members of the Makabayan bloc include Rep. Antonio Tinio of ACT Teachers, Party-list Rep. Fer-nando Hicap of Anakpawis, Reps. neri Colmenares and Carlos Isa-gani Zarate of Bayan Muna, Reps. Luzviminda Ilagan and emmi de Jesus of Gabriela and Ridon. On his part, Speaker Felicia-no Belmonte Jr. urged members of the lower chamber to attend the two-week marathon plenary deliberations of the proposed 2016 budget. “A text brigade has been made to remind our colleagues to at-tend the remaining sessions in the next two weeks. Let us all be there to show support to approve the national budget for next year,” Belmonte said. The plenary session will begin at 1:30 p.m. today (Monday). On Tuesday and the preceding days, deliberations wil l start at 10 a.m., until the national budget is approved on second reading. Belmonte also expressed con-fidence that next year’s proposed national budget will be approved on second reading before Con-gress goes on a three-week recess starting October 10 to give way to members filing their certifi-cates of candidacy.

House starts plenary deliberationson proposed ₧3.002-T 2016 budget

By Jovee Marie N. dela Cruz

The house of Representatives is set to start today the plenary deliberations on the proposed

P3.002-trillion national budget for 2016.

Budget watchdog alarmed by lump-sum appropriations in ₧3-T 2016 national budget

Senate bill SeekS to enhance owwa ServiceS to oFwS

THe Philippines has a strong chance to become one of the economic powerhouses of the

Asean region if the country takes ad-vantage of its demographic sweet spot and make more investments on human capital development, the Investor Re-lations Office (IRO) said. “Starting this year until 2050, the Philippines is said to be within the ‘de-mographic window,’ loosely defined as a period when a great majority of the population are of working age,” the IRO said. editha Martin, executive director of the IRO, said the government’s grow-ing budget for human capital develop-ment shows the intention to further improve the quality of our workforce.

It also reflects the government’s desire to make the economy reap the potential demographic dividends, she added. “Consistently rising investments in health and education will help ensure that the Philippines does not miss out on the opportunity offered by its entry to the demographic win-dow,” Martin said. The IRO said that based on official projection, the country’s working-age population—or those between 15 and 64 years old—this year accounts for 66.6 percent of the total population of 101.6 million. It further said that the share of the working-age population is expected to rise to 68 percent of 110 million people in 2020, and further to 70.6 percent

of 125.3 million people in 2030. “Because the number of workforce far outweighs that of dependents, the increase in incomes may accelerate. But this can only happen if there is a good quality of labor force,” the IRO said. economic Planning Secretary Ar-senio M. Balisacan agreed, and he stressed the need to sustain the trend of rising investments in human capi-tal development. “We need to understand that hav-ing a fast-growing working-age popu-lation is a boon for the economy, but only if we do two things: invest more and more in human capital develop-ment and make sure the job opportu-nities match the skills of the people,” Balisacan said. Bianca Cuaresma

Phl can become an asean economic powerhouse–iro

ANGARA: “Once this bill becomes

law, the new Owwa would have a clear mandate that the

OFWs and even the whole country could truly trust.”

belmONte

ExportErs, importers, and other industry players will find all the trade information they need right at their fingertips with the planned

launch in october of the philippine National trade repository (pNtr). the Bureau of Import services said it is spearheading the creation of the facility that will be the main reposi-tory of trade data intended to help enterprises conduct business with more ease and efficiency. “the pNtr is simply a Web-based portal [that will] become the single source of accurate, up-to-date, and comprehensive information relating to trade,” said sherwin prose Castañeda, assistant director at the BIs, an attached agency of the Department of trade and Industry. “If you want to know about regulations on imports, exports, documentary requirements of trade and regula-tory government agencies, you will find it in the philip-pine National trade repository,” he added. Castañeda, who spoke at a recent briefing on raising the competitiveness of small- and medium-scale enter-prises (sMEs) in global value chains, said the program will benefit sMEs by promoting transparency and ease of doing business. “We believe that if the information is readily available, especially to sMEs, we can reduce costs because we have easy access to information and so doing business becomes easy for us,” he said. Castañeda said the pNtr is “a philippine obligation,” much like the National single Window (NsW), under the Asean trade in Goods Agreement (Atiga) that requires the establishment of the Asean trade repository linking all the Ntrs of member-states. the pNtr is also the government’s response to similar commitments under the recent World trade organiza-tion’s trade facilitation agreement, philippines-United states free-trade agreement and the upcoming Asia-pacific Economic Cooperation trade repository. “In effect, we launch this by next month, this will be our compliance to four international trade agreements,” Castañeda said. “the portal is not yet finished. We intend to launch it october 28, 2015,” he added. Castañeda said that unlike the NsW which “provides an access for you to do transactions with the government,” the Ntr is purely about access to trade information with-out any means to do online business. As an example, Castañeda said an importer can go to the repository to check if a certain commodity is a regulated good, which regulatory bodies oversee such products, documentary requirements, and timeframe and fees for the release of the import permit. All Ntrs, including the philippines, should have nine key elements under the Atiga, he said. the first three-tariff nomenclature, Most Favored Nation tariffs/pref-erential tariffs, and rules of origin are to be linked to the Enhanced philippine tariff Finder launched by the philippine tariff Commission. the rest are nontariff measures, national trade and Customs laws and rules, procedures and documentary re-quirements, administrative rulings, best practices in trade facilitation, and list of authorized economic operators. the official pointed out that national trade and Cus-toms laws and rules, and procedures and documentary requirements are two of the most important elements for sMEs. Castañeda said the pNtr also went beyond the re-quired nine to include information on accreditation re-quirements and procedures for importers and exporters, as well as enquiry points for agencies. there will also be news updates especially on regulatory requirements and revisions.

By Cai U. Ordinario

rEtAIl prices of construc-tion materials in Metro Ma-nila continued to decline in

August, according to the philip-pine statistics Authority (psA). psA data showed that the Con-struction Materials retail price In-dex (CMrpI) in the National Capital region (NCr) dropped by 0.4 per-cent in August. the decline in August was larger than the 0.3-percent contraction posted in July 2015. In August 2014 the CMrpI grew by 1.5 percent. Data also showed that the decline was due to the 1.7-percent contrac-tion in the prices of electrical mate-rials—one of the heavily weighted sectors in the CMrpI. “slower annual increments were noted in the corresponding indices of carpentry materials and painting materials and related compounds at 1.5 percent and 0.5 percent, respec-tively,” the psA said. on a monthly basis, the CMrpI in Metro Manila posted flat growth due to cheaper electrical and masonry-material prices. the psA also said there was a 0.1-percent decrease in the indices of painting materials and related compounds, plumbing materials, and tinsmithry materials. However, the indices of car-pentry materials and miscel-laneous construction materials inched up by 0.1 percent and 0.5 percent, respectively. “prices of cement, paint thin-ner, GI [galvanized iron] pipes and selected tinsmithry materials gen-erally declined during the month, while higher prices were noted in wire nails and steel bars during the period. the rest of the construction materials generally remained stable this month,” the psA said. the CMrpI is a variant of the General retail price Index (GrpI), which measures the changes in the prices used by retailers to sell their goods to consumers and end-users relative to a base year. the market basket of the CMrpI is composed of 102 commodities and classified into seven major groups —carpentry, electrical, masonry, painting and related compounds, plumbing, tinsmithry and miscel-laneous materials. While the GrpI is computed monthly and comes out 36 days after the reference month, the CMrpI is available 15 days after the reference month.

By Lenie Lectura

tHE Department of Energy (DoE) has proposed anew to hold off the November auction for the selec-

tion and appointment of the Independent power-producer Administrator (IppA) for the bulk energy of the 200-megawatt (MW) Mindanao Coal-Fired thermal power plant (Mindanao Coal). DoE officer in Charge Zenaida Mon-sada said this came up following the power situation in Mindanao, where water levels continue to drop at the Agus and pulangi hydroelectric complexes due to a prolonged El Niño phenomenon. “For the sake of the people in Mind-anao. If we privatize it now the tenden-cy is there would be high power rates because there is a shortage in capacity now,” she said after the senate budget hearing last thursday. taking the side of former Energy sec-retary Carlos Jericho l. petilla, Monsada explained that an early auction could cause price shocks. petilla had explained that, while there is still a power supply shortage in Mind-anao, the IppA’s winning bidder could dictate electricity rates, which, in turn, could translate to higher electricity rates for the consumers. “there’s a shortage in Mindanao, so if there’s a shortage and you privatize that, cooperatives will get that for any price. so what I am saying is to hold off the privatiza-tion until such time that there are at least

two plants that are running,” petilla had said, adding that the coal power plants of san Miguel Corp., therma south Inc., and from the Alsons group are expected to come on line next year. peti l la’s concern was taken into consideration by the power sector As-sets and liabilities Management Corp. (psAlM), the agency tasked to privatize the assets of the National power Corp. later on, the DoE and psAlM arrived at a mutual understanding to proceed with the privatization this year albeit inserting a three-year lock-in period in the power rates. During the lock-in period, the winning bidder would have no choice but to adopt the existing power rate sold by current plant operator, steag state power Inc. (spI). In this way, electricity rates will not go up because the rates that will be used are the rates currently imposed based on the contract with steag. thereafter, psAlM scheduled the auc-tion on November 25. But Monsada said last week that it is bet-ter off not to bid out yet the IppA contract of the Mindanao coal plant. “so, the direction now is that it would be best if the privatization would take place when supply is stable. so probably by next year,” Monsada said when asked for a new timetable for the auction. However, psAlM, which will conduct the bidding, has yet to decide on this. psAlM president lourdes Alzona said the psAlM Board would still have to de-

liberate on this. “We are still waiting for the DoE data on Mindanao power supply and rate assumptions. After that, we will take it up with the Board,” she said, add-ing that the Board would likely meet in the first week of october. the DoE is a member of the psAlM Board, which is chaired by Finance sec-retary Cesar V. purisima. other board members include the secretaries of the Department of Budget and Management, the Department of Justice, and the Depart-ment of trade and Industry. “the DoE is only one in the board. Con-gress is also insisting on a deferment until supply is stable,” Monsada said. located in Misamis oriental, the Mind-anao Coal plant was constructed in 2006 for a 25-year power purchase Agreement under a build-operate-transfer scheme that ends in 2031 with steag spI. the power plant, which supplies about a fifth of Mindanao’s power require-ments, is 51-percent owned by steag; 34 percent, Aboitiz power; and 15 percent, la Filipina. psAlM earlier met with the 12 prospec-tive bidders for the Mindanao Coal, namely; Conal Holdings Corp.; FDC Davao del Norte power Corp.; FirstGen Northern power Corp.; GDF suez Energy philippines Inc.; Masinloc power partners Co. ltd.; Meralco powergen Corp.; Nexif pte ltd.; sMC Global power Holdings Corp.; spC power Corp.; team (philippines) Energy Corp.; therma southern Mindanao Inc. (tsMI); and Vivant Energy Corp.

sen. ralph G. recto said senate Bill 2951, which is being debated on the senate floor, “will not just extend the effectivity of the Agri-culture Competitive Enhancement Fund [Acef], but make it effective.” Conceived as a safety net when the country joined the World trade organization, the Acef was created by republic Act (rA) 8178 in 1996 to assist farmers affected when protectionist walls came crashing down as a result of the philippine ratification of the General Agree-

ment on tariffs and trade. It was to be funded by “in-quota tariffs” collected from imported commodities, such as rice, placed under the restricted Minimum Ac-cess Volumes (MAV) that the phil-ippines imposed. In February 2008, rA 9496 ex-tended the life of rA 8178 until De-cember 31, 2015. In his cosponsorship speech, rec-to said that, by May 15, 2013, total actual collections of Acef has reached p11.8 billion, of which p10.3 billion

[email protected] Monday, September 28, 2015 A5BusinessMirrorEconomy

was from MAV quotas and p1.2 bil-lion was from the so-called sugar- conversion fees. But, according to the Depart-ment of Agriculture and farmers’ groups, there were some p10 bil-lion more in MAV in-quota tariffs, which were collected but was nei-ther remitted to the treasury, nor booked as Acef proceeds. of the p11.8 billion that was of-ficially reckoned as Acef collections up to the summer of 2013, some p8.9 billion was disbursed by Acef Executive Committee. Included was p2.6 billion as grants to local govern-ments, government corporations and state colleges. Also approved was p5.9 billion worth of loans to 304 groups, which, except for 10, were pri-vate corporations. subsequent audit reports on the Acef, however, are littered with ad-verse findings like “dismally low repayment rate,” “double recording of loan releases” and “loans without

collateral,” recto said. “some grantees have pulled a Houdini and can no longer be found. there were p2.5 billion worth of loans covered by letters of confir-mation, whose addressees could no longer be found,” he said. In one case, proponents of a p63-million loan “have migrated to the Great Beyond,” leaving p58 million in payables, the senator said. “of the 294 private parties who were granted a total of p4.4 billion worth of loans, only 23 had fully paid as of December 2011. of the remaining 271 private borrowers, only 15, or 5 percent of the total, had no arrears,” recto said. “As a result, p2.2 billion in loans was already due and demandable three years ago. In all, outstanding arrears already hit p5.1 billion three years ago,” he added. Despite these irregularities, recto said it is not yet time “to write the requiem for Acef.” What must be written is the law reforming it.”

the senator said Acef still has bal-ance of p3.8 billion as of end-2014. “second, and more important, the concept of earmarking tariffs for local development remains valid,” he said. recto said all measures to re-form and revamp Acef were in-corporated in the bill principally crafted by sen. Cynthia Villar, chairman of the senate Commit-tee on Agriculture and Food. “With her experience in restruc-turing, no person is more qualified to write the prescriptions than her, as she has the head of a banker and the heart of a farmer,” recto said. “More stringent safeguards were put in place by Villar. For example, in the bill, there is a ceiling of p5 million per project. Gone is the era of megamillion-peso unsecured loans,” he added. Another important provision in the bill, recto said, is the revamp of the membership of the Acef Execu-tive Committee. “the chairman of the senate and

House Committee on Agriculture shall no longer joint-head the Acef Execom. In fact, they are yanked out of that body,” he said. “there is moral hazard in leading the body which you ought to over-see. Members of Congress are not supposed to serve as loan-approval officers in a purely Executive body,” recto added. there is a provision in the bill des-ignating the land Bank of the philip-pines as the one that shall manage the credit facility out of the funds, recto said. As to the Commission on Higher Education head, his or her involve-ment can be justified by the fact that Acef is also being tapped to finance the studies of students taking up agriculture courses, recto said. In hindsight, recto said the schol-arship component of Acef was one of its few bright spots. loans for production capital may have been malversed but, by and large, tuition to train human capital was not.

Senate set to OK bill to revamp agri fundBy Recto Mercene

The Senate is set to approve a measure that would reform a multibillion-peso fund financed

by tariffs collected from rice and sugar imports to ensure that funds would go to legitimate farmers and fishermen.

CHRISTMAS LANTERNS Colorful Christmas lanterns of various sizes are now being sold on Edsa in Quezon City. The Philippines is known for having the longest Christmas holiday season in the world, as Filipinos celebrate the birth of Jesus Christ as early as September. NONOY LACZA

RetAiL pRiCes Of CONstRuCtiON mAteRiALs pOsted sLight deCLiNe iN August–psA

DOE may defer auction of Mindanao coal plant

Philippine trade repository portal to go live in October

Monday, September 28, 2015 • Editor: Carla Mortel-BaricauaA6

Tourism& Entertainment

S M. G L

AT the concierge counter of a hotel, two foreigners were talking to each other. Halfway

through their conversation, one of them blurted out: “�ere is nothing to see in Manila!”

Hearing that, how could that pos-sibly be? He must have been mistak-en. If he really knows where to look, there are numerous treasures wait-ing to be explored within the city’s nooks and crannies.

Take, for instance, the walled city of Intramuros. Built during the Spanish regime in 1571, the 64-hectare stone citadel is a metaphor for the country’s capital city itself. Its stone walls echo the 400-year colorful history of Ma-nila. Its pavements testify to the rich cultural heritage that has been pre-served through the years.

Inside the wallsEXPLORING Intramuros is a walking tour. Take time to visit the Intramuros Visitors’ Center at the Baluartillo de San Francisco in Fort Santiago. Pick up some maps and brochures as guides around the walled city. But since you

are already at Fort Santiago, you might want to begin your historical tour here.

A popular tourist destination in Manila, Fort Santiago was originally built by Spanish conquistadors as a replacement to the destroyed fortress belonging to the last datu of Ma-nila. �roughout history, the fort has served as a fortress against the Chi-nese pirates, a prison for the political prisoners during the Spanish period and a Japanese torture chamber dur-ing World War II.

But the fort is best known as the place where the Philippine national hero, Dr. Jose Rizal, was imprisoned before his execution in 1896. Inside the fort is the Rizal Shrine, a museum housing Rizal’s memorabilias. Embed-ded on its pavements are his footsteps, representing his �nal walk from his cell to the location of the actual execu-tion, in Bagumbayan.

From the main gate, walk toward General Luna Street, passing by Pla-za Moriones and Palacio del Gober-nador, and take a look inside the Ma-nila Cathedral.

�e ecclesiastical seat of the Arch-diocese of Manila, the cathedral is one of the two notable remaining churches built inside the walled city; the other being the San Agustin Church. Other churches built during the Spanish times were the San Nicolas de To-lentino Church, the San Francisco Church, the �ird Venerable Order Church, the Santo Domingo Church, the Lourdes Church and the San Ig-nacio Church; gaining for the city the name “City of Churches.”

�e present-day structure of the ca-thedral is the sixth to occupy the site. �e �rst one was built in 1581 but was razed two years after it was construct-ed. �e present church was completed in 1958.

Inside the cathedral are the crypts that serve as the �nal resting place of deceased Manila archbishops, includ-ing Jaime Cardinal Sin, one of the

THROUGH THE WALLED CITY

B M T. C Mindanao Bureau Chief

THIS northeastern Mindanao re-sort island is rebranding itself from being the world’s premier

sur�ng destination to a slew of several tourism attractions, mostly on adven-ture and family fun, in its bid to entice year-round visit.

Only last year that the island snatched the prime Civil Aviation Au-thority of the Philippines approval to upgrade its 1.2-kilometer Class 2 principal, or minor domestic, airport, to international status, with immedi-ate plan to add 1 more kilometer to its strip and expanding the runway wide by another 300 meters.

Mayor Alfredo Matugas Coro II of Del Carmen town said rebranding al-ready propped up plans from all the nine municipalities of Siargao Island to prime up their attractions and prod-uct o�ering.

His town, for example, is craft-ing up production and marketing of its mangoes while developing pools

and beaches for visitors with family members in town.

“�ere are caving, diving and kaya-king activities in the other beaches,” he told reporters at the side of the climate-change seminar here organized by the

Department of Agriculture and the Phil-ippine Agricultural Journalists Inc.

What was quite successful so far was the emergence of being one of the world’s game �shing destination, held on the end of March toward May, he said.

Siargao rebrands to multitourism destination

MAYOR Alfredo Matugas Coro II

INTRAMUROS Golf Club

PRACTICING at the track

MANILA Cathedral

Tourism& [email protected] • Monday, September 28, 2015 A7

1986 Edsa Revolution movers that ousted President Ferdinand Marcos.

Walk further down and one would see the other remaining church built during the Spanish period. First con-structed in 1571, San Agustin Church has been destroyed and rebuilt several times before the present-day structure was completed in 1604, with an earth-quake-proof design.

�e church has 14 side chapels, hand-carved wooden pews and the 18th-century pipe organ, and most people could not help but marvel at its beautiful trompe l’oeil ceiling. Be-side the church is a museum housing Spanish vestments, religious art-works and pieces of furniture.

Designated as a United Nations Educational, Scienti�c and Cultural Organization World Heritage Site in 1993, the church also has a crypt. His-tory has it that Spanish and American commanders had discussed Manila’s terms of surrender in its vestry. Also, the Japanese invaders had killed about 140 people on the church premises during World War II.

Other interesting places nearby in-clude the Puerta de Santa Lucia, one of the several gates passing through the walls. Constructed in 1603, the gate leads to Malecon Drive. �ere is also Casa Manila, a reconstruction of the Spanish colonial house, where guests can take a glimpse of how Filipinos lived during the Spanish time.

New way to explore IntramurosIF you have strolled around the walled city, one could not help but notice the green patches of land that are part of the Club Intramuros Golf Course.

In 1898, when the Americans took over from the Spaniards, the moat around Intramuros was drained and re-claimed. It was later covered with grass, spruced up with sand pits and ponds, and was turned into a golf course. Considered the oldest golf course in the country, In-tramuros Golf Club has an estimated 4,000-yard greensward, complementing the centuries-old walls.

Simply Moving Philippines Inc. (SMPI) has partnered with the Depart-ment of Tourism and the Intramuros Administration to create a unique tour to see the di�erent sights within and outside the walled city of Manila us-ing a Segway, a self-balancing personal transportation vehicle.

“Most golfers come here with com-panions, or with their family. While the golf course is not that expansive, it still takes time to �nish the 18 holes. �is tour is the best way to keep the com-panions occupied while waiting for the golfers to �nish their game, and give them something to look forward to when visiting the golf club,” said SMPI COO George Apacible, who shared that the Segway tour was �rst introduced in the Philippines in Boracay in 2012. But it has been already making the glide at the world’s major tourist destinations, such as Barcelona, Washington, D.C., Paris and Singapore.

A glide through historyONBOARD our Segway, our tour guide led us to our �rst stop: Reducto de San

Francisco Javier. When the Spanish conquistadores made some renova-tions in Fort Santiago, they added this tunnel and ravelin to serve as protec-tion for some parts of the riverside and seashore.

On the platforms at the top, they placed cannons; while gun powders and ammunition were stored in the chambers below. Like most parts of Intramuros, this forti�cation had been badly damaged during the war. After its renovation in the 1980s, it was con-verted into a shrine for the Our Lady of Guadalupe.

Gliding through the fairways, we reached the beautiful greenery that serves as the verdant stage for Manila’s historical landmarks, such as the Pala-cio del Gobernador—an eight-story o�ce building that was built as the o�cial residence of the Spanish gober-nador-general. We could also see the Manila Cathedral from the golf course.

We also stopped by the monument of Miguel Hidalgo, a Mexican liberator. Opposite the small park was a narrow rough road leading to one of the en-trances to Intramuros. Next, we came by the Postigo del Palacio, where Rizal was taken here en route to Bagumbay-an (currently known as Luneta Park), the place of his execution, on Decem-ber 30, 1896.

Riding the Segway, we followed the long circuit of massive stone walls and forti�cations. From our vantage point, we saw the irregular outline of the defensive walls. History has it that the walls follow the contours of Ma-nila Bay and the curvature of the Pasig River. After 30 minutes of maneuver-ing the personal transport vehicle, we went back to the starting point.

Sometimes, one need not travel for hours to �nd and create a new experi-ence. Even in the heart of Manila, one can �nd a destination that can drown the madness of the city life. As for the two foreign tourists, with the right perspective, they hopefully would �nd beauty and poetry beyond the gritti-ness and chaos that is Manila.

THROUGH THE WALLED CITY

“�ese are more of an adventure type, but the construction of pools and development of beaches at the other side of the island would be intended for the families of surfers,” he said.

�e island’s natural landscape and natural shield from adverse changes in the climate is its natural attrac-tion though, he said. Siargao Island’s 120,000 hectares of mangrove is the country’s largest National Integrated Protected Areas System site.

�e rebranding would hope to spike further the 100,000 annual visits by tourists, which started with only 38,000 in 2010.

“We have to spread around the eco-nomic bene�ts of tourism to the more than 120,000 residents of the island,” he added. In 2010 poverty index was pegged at 67 percent.

�e approval to upgrade the Sayak Airport, more popularly known as Siargao airport, would also be intended to persuade airline companies to use their bigger aircraft. �e airport could accommodate only the turboprop and Bombardier aircraft.

“We cannot attract more �ights be-cause airline companies are buying the bigger planes,” he said.

By next year, Coro said, the Depart-ment of Public Works and Highways would have completed the concreting of the 162-kilometer circumferential road.

“More than improving access, we are also improving governance and services to locales and tourists, and health services improved on the area of trauma therapy to respond to accidents in sur�ng and other adventure sports,” he said.

He added that peace and order “is not a problem here, because no one is interested to come here to commit crime; they won’t just cross the 60-km stretch of water [from mainland Su-rigao del Norte] or the Paci�c Ocean to commit something bad.”

“�e prime motive to improve gov-ernance and increase tourism is to improve the livelihood of our people,” he said, saying, “We have to provide more opportunities other than �sh-ing, that only earn them an average of P2,000 a month.”

Siargao rebrands to multitourism destination

EL Puerto Marina Beach Resort and Vacation Club is the place to relax, have fun and taste deli-

cious food. Located at Maniboc, Lin-gayen, Pangasinan, its surroundings are �lled with lush trees and plants. Another plus for the resort is that it is near the beach, perfect for newlywed couples enjoying their honeymoon, or a holiday outing with family or friends.

At the resort, visitors can enjoy ac-

tivities, such as beach volleyball, bil-liards, kayaking and many more. �e sta� are very friendly and e�cient, and always available to assist custom-ers with any concern.

For accommodations, they o�er rooms that recreate the feel of tradition-al Filipino homes. Some rooms look like cottages or nipa huts, and make for a very relaxing and convenient stay. Each of their family rooms are equipped with

a �at-screen TV, hot and cold shower, full kitchen and living room. To keep the fam-ily rooms cozy and cool, new Daikin Split Type air-conditioners were installed by Diamzon and Gopez Refrigeration & Airconditioning Industries Co.

As an ideal place to get away from the busy city life, visitors can expect a relaxing weekend or vacation with their loved ones at the El Puerto Marina Beach Resort and Vacation Club.

LEISURE TIME AWAY FROM THE CITY LIFE

THE Department of the Interior and Local Government (DILG) and the government of Canada,

through the Local Governance Sup-port Program for Local Economic Development (LGSP-LED), recently hosted a Tourism Investment Forum at the SMX Convention Center.

With the theme “Growing Local Economies through Connecting Tour-ism Communities and Businesses,” the event convened local chief execu-tives and investment promotion of-�cers from partner business-friendly provinces and cities, as well as busi-ness groups, associations and entre-preneurs interested in the tourism growth opportunities in the country.

�e Tourism Investment Forum, which was held as part of the Galing Pook Foundation’s Governance Fair 2015, aims to unite local government units (LGUs) and business leaders

with the common goal of developing real poverty solutions by advancing local economic development. Here, participants were able to exhibit tour-ism growth opportunities to potential investors, developers and lenders, as well as showcase what it has contrib-uted to the country’s overall tourism development. It also featured discus-sions on best practices and mecha-nisms essential in creating the kind of local business environment that will transform the Philippine local tour-ism industry into a promising invest-ment destination.

�e LGSP-LED is an eight-year joint program of the Canadian and the Philippine governments with a goal of promoting e�cient, responsive, trans-parent and accountable governance at all levels. Its purpose is to reduce poverty by strengthening local gover-nance and supporting sustainable lo-

cal economic development (LED).Since 2008, LGSP-LED has assisted

17 provinces, 17 cities and hundreds of municipalities in the country in streamlining their local business per-mits and licensing systems, updating their local incentive investment and revenue code, creating local economic and investment promotion o�ces, and strengthening their engagement with the private sector for investment promotion and tourism product de-velopment and destination market-ing. It has completed local economic development initiatives in nine proj-ect sites across the Philippines that aim to attract investments, increase tourism arrivals, and create jobs for 11 provinces, eight cities and 60 mu-nicipalities. LGSP-LED LGUs attract-ed almost P6 billion in investments and created over 2,200 new jobs for their communities.

DILG, CANADA HOST TOURISM INVESTMENT FORUM

WATER slides at the swimming area

MANGROVE trees line up the coasts along Del Carmen town in Siargao Island

NARROW passage THE path to Intramuros

[email protected]

Ferdie Balanag, media rela-tions officer of the foundation, on Wednesday said this was one of the foundation’s activities aimed to en-sure that the future and younger generation will still have a green environment to inherit.

Balanag added the tree-planting activity called “Green Life” is one of the foundation’s ways of showing the love for the environment.

“The retirees feel that it is their responsibility to protect the environment for the future generations to have refreshing shades and green surroundings,” Balanag said.

As a member, Balanag said, “we are committed to continue our pro-gram for our environment.”

“We help enhance the country’s forest stock to absorb carbon diox-

Baguio City foundation plants trees for future generations

BAGUIO CITY—Members of the Blessed Association of Retired Persons (BARP) Foundation

Inc. planted more than 100 pine-tree seedlings at Camp 8 Watershed and 200 fruit-bearing trees on their own initiative.

TimeBusinessMirror

Our

China’s ponzi-dodging pensioners chase high returns, free lunch PhilHealth to members: Avoid hassles; make sure premium payment is updated

Monday, September 28, 2015 • Editor: Efleda P. Campos

ide which is largely blamed for global warming,” he said.

Balanag said the activity is also BARP’s contribution to the National Greening Program of the govern-ment, which aims to promote en-vironmental stability, biodiversity conservation, enhance climate-change mitigation and reduce pov-erty by providing alternative liveli-hood activities.

BARP has been planting trees for the past several years and the last time they went around to in-spect, the fruit trees like guava, avocado and lemon were ready for harvesting.

BARP is the largest organiza-tion of senior citizens and retired persons in Northern Luzon with a total membership of over 13,000 and still growing. PNA

A8

LITTLE known small invest-ment firms have been popping up all over China, luring pen-

sioners’ savings by promising annual returns of more than 10 percent, and sometimes as high 60 percent, to fund cash-thirsty projects unable to get bank loans.

Distributing fliers outside su-permarkets and drawing on word-of-mouth, the private firms—part of China’s unregulated network of shadow financing—typically lure retirees with the offer of free lunch.

A recent feast of radish soup, spare ribs, red-cooked pork, fried vegeta-bles and a yogurt cup at a downtown Beijing restaurant drew about 100 mostly elderly people to hear a pas-sionate lecture on the importance of investing. Attendees were treated to a magic show in which a magician chopped off the hand of his assistant in a bloody flourish, a bamboo flute concert, a whirling acrobat, and lucky drawings—as well as the promise of 12-percent annual returns to lend their money to a real-estate project in Chengdu.

“The project sounds not bad, just the return is a bit low,” said Fan, a blasé 62-year-old attendee who only gave her surname. She does this all the time and normally expects higher rates, no less than 15 percent on av-erage, she said.

That’s low compared with other investments being touted to Beijing’s elderly. A typical supermarket flier will list several offers with returns in the low double-digits. When po-tential investors phone up, they’re offered higher rates for even riskier products. A recent one, to fund the ac-quisition of a small oil-pipe company in Jilin province, promised 5 percent a month, or 60 percent annually.

The risk that some will turn out to be Ponzi schemes and never pay back the principal propels the wisest of the elderly investors to be wary. They advise each other to attend only investment pitches with lower returns, eat the free lunch on offer and take their money out relatively quickly before any signs of repay-ment difficulties emerge.

Another lunch attendee who only gave her surname as Wang said her self-imposed cutoff for investments is a 20-percent annual return, and that she makes site trips to see proj-ects herself whenever possible. She knows two people who put money into a product offering more than 30 percent last year, only to see their investments sour after receiving just two monthly payments, she said.

“My experience is, don’t stick with any company for too long,” Wang said, as the emcee loudly read out names of people who he proclaimed had just collectively pledged more than 2 million yuan (about $313,800) to fund the Chengdu project.

While it’s possible for experienced investors to make money from in-vestments that turn out to be Ponzi schemes, the risk is like “pulling chestnuts out of the fire,” said Liao Qiang, a Beijing-based analyst for Standard & Poor’s.

China’s 147 million pensioners are plowing more of their money into in-vestments other than deposits. Net inflows into open-end mutual funds jumped 32-fold from a year earlier to 1 trillion yuan last year, according to a June report from the Asset Man-agement Association of China. While investors older than 60 accounted for only 9 percent of all such accounts, their average investment of 42,800 yuan as of December 31 was the high-est among all age groups, compared to 8,100 yuan among people younger than 30, according to the report.

As China’s massive market sell-off leaves many Chinese jittery about stocks, little-known invest-ment companies have proliferated, prompting authorities to try to crack down with little result. China’s low-ering of interest rates paid by banks four times this year, as well as a tight-ening of lending to riskier projects, is also fueling growth.

“This informal lending segment of the shadow banking system is one of the least transparent and regu-lated, and is likely to be among the most risky for investors,” said Ste-phen Schwartz, a Hong Kong-based senior vice president at Moody’s Investors Service. “Based on anec-dotal information, we understand that this activity has become more widespread in the past year or two.”

Demand for loans is unrequited in a country where the shadow banking system, which includes all lending outside banks, has already grown to an estimated 41 trillion yuan at the end of last year, equivalent to 65 percent of gross domestic product, ac-cording to Moody’s. Small businesses and unrated property developers are likely “encountering tighter financ-ing conditions” as increased govern-ment scrutiny slows the growth of core channels such as trust loans, the rating firm said in a July report.

While many of the investment companies are registered asset managers with offices in high-rise downtown buildings, they risk vio-lating a government rule banning any marketing of private products to the general public.

Under current rules, private in-vestment products can only be sold to qualified investors that have at least 500,000 yuan average annual income in the past three years, no promise on repayment of principal or yield is allowed, and investment in a single product shouldn’t be lower than 1 million yuan. Often the qualifica-tion requirements are skipped, high returns committed, and investments of as small as 50,000 yuan welcomed, according to investors interviewed by Bloomberg News.

While shadow financing keeps growing, the government has rare-ly taken the initiative to “burst the bubble,” and any efforts tend to be just after-risk remedies unable to prevent losses, Liao said.

“I feel that regulatory and law- enforcement authorities are some-

what out of step with the changes in the financial market,” Liao said. “It’s quite a pity from the perspec-tive of both financial stability and investor protection.”

The government’s pursuit of il-legal fund-raising cases in Beijing more than tripled to 89 in 2014 from the previous year, with inves-tors affected nationwide jumping sixfold to 21,000 and investments involved skyrocketing 57 times to 17.3 billion yuan, according to offi-cial data from city authorities. Such cases continued to surge 65 percent in the first five months of this year, the government said.

That prompted the local govern-ment in May to launch a four- month crackdown on illegal fundraising, saying in an April 30 statement that such cases have been frequently found in areas of private investment funds, online lending and wealth management, causing “huge losses” and “serious impact on social order.”

Among the cases was a private investment company known as Cheng Ji Da Yi, a familiar name among investors after its financ-ing director disappeared with client money late last year, according to police statements then.

The risks are hardly enough to stop investors from seeking high returns that traditional channels can’t offer. Five interest rate cuts since November reduced the appeal of banks’ wealth-management products, and returns available through peer-to-peer on-line lending, which fell to 13 percent in August, pale in the face of private products. Bloomberg News

THE Philippine Health Insur-ance Corp. (PhilHealth) has reminded members to main-

tain an updated payment of premi-ums or contributions in order to avoid hassles in times of hospital-ization of a member or any of his or her dependents.

“It is important that members like those in the formal and infor-mal economy make the specified payments of contributions to ensure entitlement to PhilHealth benefits, so that in times of sickness or hospi-talization of the member or depen-dents, there would be no problem in availing of benefits,” Dr. Israel Fran-cis A. Pargas, officer in charge vice president for PhilHealth Corporate Group, said on Wednesday.

Pargas said employees in the gov-ernment and private sectors, includ-ing kasambahay and family drivers, as well as self-earning individuals, must have paid at least three months’ premium contributions within the immediate six-month period prior to the first day of confinement for them to avail themselves of the ben-efits from PhilHealth.

The policy is specified under PhilHealth Circular 32, Series of 2014, which Pargas cited as a flex-ible means for members to pay pre-mium contributions before the first day of hospitalization.

The PhilHealth official noted that such scheme is in a way flex-ible and lighter than the previous policy wherein a member was re-quired to have made payment in the previous succeeding months prior to confinement.

“Before, if members or depen-dents got hospitalized, they were required to have made payments of six months backward prior to confinement. But with the existing scheme, all they have to ensure is there should be a payment of three months [not necessarily in order] within a six-month period prior to confinement,” he said.

The payment is not necessarily in order as long as there is a payment of a total of three months during the six-month period.

To illustrate, if a member is con-fined, for example, on September 15, he or she should have made three payments of premiums with-in the six month-period backward (March to August).

Pargas said that for indigents, sponsored members, senior citizens and overseas Filipino workers, the availment period is different.

“On the first day [or Day 1] of the effectivity/validity of their cov-erage, they can immediately avail of the benefits, in case, they will need it,” he said.

Indigent members are those iden-

tified by the Department of Social Welfare and Development through the National Household Targetting System for Poverty Reduction who have “no visible means of income,” or whose income is not enough to sustain a family.

Sponsored members are persons whose contributions are being paid for by government agencies, private entities, or another individual.

Formal economy members are those who have contracts or fixed term of employment such as gov-ernment workers and private sec-tors, owners of micro, small, me-dium and large enterprises, house-hold helpers, family drivers.

Informal economy members are migrant workers, self-earn-ing individuals, Filipinos with dual citizenship, naturalized Filipino citizens and citizens of other countries residing/work-ing in the Philippines.

Lifetime members are those who have reached the age of re-tirement and have made at least 120 contributions.

Senior citizens are elderly mem-bers who are 60 years old and above and who are not covered under any of the member categories of the Na-tional Health Insurance Program by virtue of Republic Act 10645, or the Mandatory PhilHealth Coverage for all Senior Citizens.

The contribution for PhilHealth member totals P2,400 for one year equivalent to P200 a month, or an average of P6.60 a day.

That amount gives the member and his/her dependents security or relief in high costs of hospitalization through the health coverage benefits that can be availed once they are confined in hospital.

These health coverage comes in the form of health benefit packages.

The health benefit packages range from inpatient benefits, catastrophic, or Z-benefits, outpa-tient benefits, primary care ben-efits, or TSeKaP, (initially avail-able to indigents/sponsored and Department of Education teaching and nonteaching personnel) and other benefits.

In the process, the PhilHealth pays the hospitals/health pro-viders for the package of ben-efits availed and deducted from the total bills of the member patient/dependent.

The indigents and senior citi-zens (not gainfully employed) Phi lHealth contr ibutions as members are being paid by the national government through the “sin” tax revenues.

They also enjoy the no balance billing policy when admitted in government hospital facilities. PNA

SHARING ICE CREAM WITH GRANDMA A young girl shares her ice cream with her grandmother in the middle of the road in Baguio City. MAU VICTA

VETERANS’ PARADE War veterans living in the city of Baguio proudly walk the streets along the central business district during a parade celebrating the city’s liberation from Japanese forces during World War II. MAU VICTA

CHINA EASTERN AIRLINES CORPORATION LIMITEDGeneral Conditions of International Carriage for Passenger and Baggage

President’s Statement The General Conditions of International Carriage for Passenger and Baggage of China Eastern Airlines Corporation Limited is a contract of air carriage entered into by and between CEAIR and a Passenger carried by CEAIR, specifying the rights and obligations of both parties and any liabilities assumed by either party arising from breach of the contract, and shall be binding upon CEAIR and the Passenger. CEAIR will offer all or part of the text of these Conditions at its ticket offices and on its booking websites, and earnestly urge Passengers to read these Conditions carefully and inquire about the meanings of the relevant contents before booking tickets. Purchase of tickets shall be deemed as acceptance by Passengers of these Conditions and agreement by Passengers to perform the contract of carriage pursuant to these Conditions.

President of China Eastern Airlines Corporation Limited:Table of Content

Article 1 Definitions ........................................................................................................................... 3Article 2 Scope of Application .......................................................................................................... 9Article 3 Tickets ................................................................................................................................. 10Article 4 Fares, Taxes and Charges ................................................................................................ 15Article 5 Reservations and Purchase of Tickets ............................................................................. 16Article 6 Overbooking ....................................................................................................................... 21Article 7 Check-in and Boarding ...................................................................................................... 21Article 8 Baggage .............................................................................................................................. 24Article 9 Flight Schedules, Delays and Cancellations .................................................................... 37Article 10 Refusal to Transport and Limitation of Carriage .............................................................. 40Article 11 Refunds .............................................................................................................................. 42Article 12 Changes to Tickets ............................................................................................................ 47Article 13 Passengers Services ........................................................................................................ 48Article 14 Services Provided by Third Parties .................................................................................. 49Article 15 Conduct Aboard Aircraft .................................................................................................... 50Article 16 Administrative Formalities ................................................................................................. 51Article 17 Successive Carriers .......................................................................................................... 52Article 18 Liability for Damage ........................................................................................................... 53Article 19 Claims and Actions ............................................................................................................ 57Article 20 Effectiveness and Modification ......................................................................................... 59

Article 1 DefinitionsAs used in these General Conditions of Carriage for International Passengers and Baggage, except as otherwise required or expressly defined herein, the following terms shall have the meanings ascribed below:1.1 “Convention” means one kind of treaties which shall be concluded by and among three or more

countries in respect of certain political or specific issues. As used herein, the term means the treaties on International Air Transport concluded by the People’s Republic of China, including but not limited to:

1.1.1 Convention for the Unification of Certain Rules for International Carriage by Air, signed at Montreal on May 28, 1999 (abbr. the Montreal Convention);

1.1.2 Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on October 12, 1929 (abbr. the Warsaw Convention);

1.1.3 Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on October 12, 1929, signed at The Hague on September 28, 1955 (abbr. The Hague Protocol)

1.1.4 Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo, Japan on September 14, 1963 (abbr. the Tokyo Convention)

1.2 “International Air Transport” means carriage in which, according to the contract of carriage, the place of departure, the place of destination or any Agreed Stopping Place, whether or not there is a break in the transportation or a transfer, is not situated in the People’s Republic of China.

1.3 “Regional Route Air Transport” means carriage between or among certain places within the People’s Republic of China, including Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan.

1.4 “CEAIR” means the abbreviation of China Eastern Airlines Corporation Limited, with the English Code: MU.1.5 “Carrier” means the air carrier issuing the ticket and all air carriers that carry or undertake to carry the

Passenger and his/her Baggage thereunder.1.6 “Issuing Carrier” means the airline showing its accounting code on flight coupons or value coupons of

Electronic Tickets. The Issuing Carrier shall be the controlling and authorized entity of the Electronic Ticket sales.

1.7 “Marketing Carrier” means the airline showing its airline code on flight coupons or value coupons of Electronic Tickets. In case of a bilateral agreement (e.g. an airline code sharing agreement), the Marketing Carrier may not be the Operating Carrier.

1.8 “Operating Carrier” means the airline performing all or part of a contract of carriage.1.9 “Regulation of CEAIR” means the provisions, other than these Conditions, governing carriage of

Passengers and their Baggage published by CEAIR with immediate effect as of the issuance of Tickets, including the valid and applicable fares.

1.10 “CEAIR Passenger Sales Agent” means an enterprise authorized by and on behalf of CEAIR to sell the products of passenger carriage by air within the scope of authority.

1.11 “CEAIR Ground Services Agent” means an enterprise authorized by and on behalf of CEAIR to provide ground agent services of Passenger and Baggage carriage by air within the scope of authority.

1.12 “Passenger” means any person, except members of the crew, carried or to be carried in an aircraft with the consent of CEAIR.

1.13 “Child Passenger” means a Passenger who has reached his/her second birthday but not his/her 12th birthday as of the date of commencement of carriage by air.

1.14 “Infant Passenger” means a Passenger who has reached his/her 14 Days of age but not his/her second birthday as of the date of commencement of carriage by air.

1.15 “Group Passenger” means a Passenger in a group of 10 or more persons (or the minimum number of Passengers required in certain product), having the same itinerary, boarding dates and flights with the other Passengers in the group and paying the same Fares for Passengers in the group.

1.16 “Tariff” means fares, charges and/or any other applicable conditions published by CEAIR.1.17 “Normal Fare” means the highest fare for adults published by CEAIR in local currency for a First Class,

Business Class and Economy Class service.1.18 “Special Fare” means the fare lower than a Normal Fare and subject to service limitations.1.19 “Passenger Reservation Document” means the business document used for reservation and issuance

of a Ticket by CEAIR or a CEAIR Passenger Sales Agent, which must be filled in by a Passenger before purchasing a Ticket.

1.20 “Reservation” means a reservation made for the seat and cabin class booked by a Passenger or the weight and size of Baggage.

1.21 “Valid Identification Certificates” means the documents produced by a Passenger when purchasing a Ticket and checking-in so as to prove his/her identification as prescribed by competent governmental authorities (e.g. a valid (visa) passport, travel document of a Hong Kong, Macau or Taiwan resident, seaman's book, etc.).

1.22 “Ticket” means the record of carriage sold or recognized by and vesting the carriage right with CEAIR or a CEAIR Passenger Sales Agent, including paper Tickets and Electronic Tickets.

1.23 “Interline Ticket” means a Ticket on the services of two or more flights.1.24 “Conjunction Ticket” means a Ticket issued to a Passenger concurrently in conjunction with another

Ticket and which together constitute a single contract of carriage.1.25 “Fixed Ticket” means a Ticket with the flight and boarding date fixed and the seat confirmed.1.26 “Open Ticket” means a Ticket with the flight and boarding date unfixed and the seat unconfirmed. 1.27 “Flight Coupon” means a portion of a paper Ticket that indicates two travel points between which the

coupon is “good for carriage.”1.28 “Passenger Coupon” means that portion of a paper Ticket marked with “Passenger Coupon”, which

shall be retained by the Passenger at all times.1.29 “Electronic Ticket” means a Ticket in electronic data sold by CEAIR or a CEAIR Passenger Sales Agent

and is the electronic substitute for a paper Ticket. 1.30 “Air Services Electronic Ticket Itinerary” (hereinafter referred to as the “Itinerary”) means the document

produced by CEAIR or a CEAIR Passenger Sales Agent to a Passenger as a payment voucher for purchase of an Electronic Ticket and a reminder of the Passenger’s itinerary.

1.31 “Day” means a calendar day rather than a working day, including all seven days of a week. The issuance day of a Ticket or the commencement day of a carriage shall not be counted in the case of determining duration of validity of a Ticket, and that the issuance day of notice shall not be counted in the case of notifying a Passenger.

1.32 “No-show” means a Passenger’s failure to get on board due to his/her failure to check-in within the prescribed time limit or to comply with the requirements for travel documents.

1.33 “Missing Flight” means a Passenger’s failure to board on the designated flight after the check-in at the place of departure or during the stay at the stopping place.

1.34 “Wrong Plane” means a Passenger’s boarding on a wrong aircraft rather than the one indicated on the Ticket.

1.35 “Misconnection” means a Passenger’s failure, due to the delay or cancellation of flight, to catch the connecting flight in which he/she holds a confirmed seat so as to continue the journey.

1.36 “Overbooking” means a selling of seats in excess of the maximum seating capacity on the flight.1.37 “Volunteer of Denied Boarding” means a Passenger who has been ready to board but is willing, upon

CEAIR’s request, to relinquish his/her seat in exchange for compensation according to the Regulation of CEAIR.

1.38 “Refusal to Transport” means a situation in which CEAIR refuses to transport a Passenger and his/her Baggage due to security or other reasons.

1.39 “Code Share Flight” means a flight operated by a Carrier on which CEAIR uses its airline code through agreement, or a flight on which several airlines use their flight numbers respectively.

1.40 “Baggage” means such articles and other personal property of a Passenger as are necessary or appropriate for wear, use, comfort or convenience in connection with his/her trip, including both Checked Baggage and Unchecked Baggage of the Passenger.

1.41 “Checked Baggage” means Baggage of which CEAIR takes custody and carriage and for which CEAIR has issued a Baggage Check.

1.42 “Unchecked Baggage” means Baggage other than Checked Baggage attended by the Passenger.1.43 “Free Baggage Allowance” means the baggage allowance of a Passenger’s Checked Baggage free of

charge according to the Regulation of CEAIR. 1.44 “Baggage Check” means the portion of a Ticket which is related to the baggage carriage for a

Passenger.1.45 “Identification/Claim Baggage” means the document issued to a Passenger by CEAIR solely for

identification of Checked Baggage.1.46 “Assistive Device for Individual with a Disability Passenger” means any piece of equipment that assists

a Passenger with a disability to cope with the effects of his or her disability. Such devices are intended to assist a Passenger with a disability to hear, see, communicate, maneuver, or perform other functions of daily life, and may include medical devices and medications.

1.47 “Check-in Closes Time” means the latest time for a Passenger to check in as prescribed by CEAIR.1.48 “Departure Time” means the time after which Passengers have boarded on the flight, Baggage and

cargo have been loaded and all cabin doors have been shut down.1.49 “Force Majeure” means the unforeseeable, unavoidable and insurmountable objective circumstance,

the consequence of which still cannot be shunned after all reasonable measures have been taken.1.50 “Voluntary Refund” means a refund made in the event the Passenger fails to finish the journey

according to the contract of carriage due to his/her own reasons.1.51 “Involuntary Refund” means a refund made in the event the Passenger fails to finish the journey

according to the contract of carriage because of early departure, delay or cancellation of flight, or change in itinerary, or inability to provide previously confirmed seat of CEAIR.

1.52 “Change Fees” means fees paid by a Passenger who voluntarily changes his/her flight or boarding date subject to applicable conditions of the original Ticket and these Conditions.

1.53 “Damage” means loss caused to CEAIR by death of or bodily injury to a Passenger on board the aircraft or during the course of getting on or getting off the flight; or loss or any other damage caused during which all or part of property is taken custody by CEAIR or any theft of the property; or loss caused to Unchecked Baggage attended by a Passenger due to CEAIR or its agent’s fault.

1.54 “Special Drawing Rights (SDRs)” mean a kind of reserve assets and unit of account defined by the International Monetary Fund (IMF), representing a claim to currency allocated by IMF to IMF member countries for which they may be exchanged. As a kind of unit of account rather than a currency, SDRs must be exchanged into a currency before use, and cannot be used directly for payments under trade or non-trade items. SDRs are supplementary to the ordinary drawing rights defined by IMF.

1.55 “Stopover” means a deliberate interruption of a journey by the Passenger at a point between the place of departure and the place of destination, which has been agreed to in advance by CEAIR.

1.56 “Agreed Stopping Place” means the place, except the place of departure and the place of destination, set forth in the Ticket or shown on CEAIR’s timetables as a scheduled stopping place on the Passenger’s route.

1.57 “Minimum Connecting Time” means the minimum time published by CEAIR for a Passenger to stay at the stopping airport to process formalities for interline carriage or transfer of flights.

Article 2 Scope of Application2.1 General Principles2.1.1 Except for those specified in Articles 2.1.2, 2.2, 2.4 and 2.5, these Conditions apply to all International

Air Transport and Regional Route Air Transport of Passengers and Baggage performed by CEAIR aircrafts for remuneration.

2.1.2 These Conditions also apply to carriage under gratuitous fares and Special Fares, unless otherwise prescribed for the carriage conditions, contracts and tickets of gratuitous fares and Special Fares. In case of any discrepancy, special conditions and Tariff rules shall prevail.

2.2 Chartered Aircrafts In the case of carriage provided by the CEAIR contract of chartered aircrafts, these Conditions only

apply to the extent where they are covered in the contract of chartered aircrafts and the provisions on the ticket of chartered aircrafts.

2.3 Code Share In accordance with code share arrangements between CEAIR and other Carriers, these Conditions

only apply to carriage of Code Share Flights operated by CEAIR.2.4 Rules of Effectiveness The General Conditions of International Carriages for Passenger and Baggage of China Eastern

Airlines Corporation Limited and the Tariff rules of CEAIR shall come into force upon the issuance of all the Tickets. If such issuance time has not been determined, these Conditions and Tariff rules of CEAIR shall come into force as of the commencement date of carriage indicated in the Passenger Coupon of the first Ticket (Electronic Ticket).

2.5 Overriding Law Under the circumstance that any provision hereunder is contrary to any applicable laws, administrative

regulations, rules and orders of a nation, except for those inconsistent provisions, the validity of the remaining provisions hereunder shall not be affected.

Article 3 Tickets3.1 General Provisions3.1.1 The Ticket constitutes prima facie evidence of the contract of carriage between CEAIR and the

Passenger.3.1.2 CEAIR or CEAIR Passenger Sales Agents shall fulfill the obligation to issue a Ticket to a Passenger

only after the Passenger has paid the fare in full as required by CEAIR.3.1.3 CEAIR will only provide carriage service to the Passenger named on the Ticket and may request the

Passenger to produce his/her Valid Identification Certificates (see Article 1.21 herein).3.1.4 The Ticket is non-assignable.3.1.5 If a Passenger travelling on a Paper Ticket fails to produce a valid Ticket issued pursuant to the

Regulation of CEAIR containing the Flight Coupon for the intended flight and all other unused Flight Coupons and Passenger Coupons, such Passenger has no right to request for boarding. A Passenger who produces an incomplete Ticket or a Ticket that has been changed by a person other than CEAIR or CEAIR Passenger Sales Agents also has no right to request for boarding.

3.1.6 A Passenger travelling on an Electronic Ticket shall produce his/her Valid Identification Certificates used for purchase of the Ticket. If the electronic Flight Coupon is displayed as valid, CEAIR will provide carriage; if the Electronic Ticket has been converted into a Paper Ticket, CEAIR will provide carriage to the Passenger only after the Passenger produces the valid and complete Paper Ticket.

3.1.7 The Flight Coupons of the Ticket shall be used in sequence as specified on the Ticket, starting from the place of departure. Failure to use the Flight Coupons in the aforesaid sequence will result in the refusal of CEAIR to provide carriage.

3.1.8 The flight segments and the class of service shall be indicated on each Flight Coupon and shall be accepted by CEAIR for carriage after the seat and the commencement date of the flight are confirmed. In the case of Flight Coupons with seats unconfirmed, CEAIR will make Reservations for the Passengers, upon their applications, subject to the applicable conditions and fares of the Tickets held by the Passengers and the availability of seat capacity on the flight.

3.1.9 The Passenger shall finish all the itineraries indicated on the Ticket within the duration of validity of the Ticket.3.1.10 In the case of an international and regional Interline Ticket containing a domestic flight segment,

the Flight Coupon of the domestic flight segment can be used directly without being converted to a domestic Ticket.

3.1.11 A Ticket shall be invalid in the event of any alteration made by any person other than CEAIR, CEAIR Passenger Sales Agents or CEAIR Ground Services Agents.

3.2 Duration of Validity of Tickets3.2.1 A Ticket shall be valid for a one-year period, except for Special Fare Tickets, from the commencement

date of the first carriage, or from the issuance date of the Ticket if the Ticket has not been used.3.2.2 Duration of validity of Special Fare Tickets shall be subject to the applicable conditions of such Special

Fare as prescribed by CEAIR.3.2.3 Duration of validity of Tickets shall begin from the zero hour of the day immediately after the

commencement of travel or issuance of a Ticket to the zero hour of the day immediately after expiry of the duration of validity.

3.3 Extension of Duration of Validity3.3.1 If a Passenger fails to travel within the duration of validity of the Ticket due to any of the following

reasons, the duration of validity of the Ticket shall be extended to a soonest date in which the seats of the same class as purchased by the Passenger are available in a CEAIR flight:

3.3.1.1 CEAIR cancels the flight on which a Passenger holds a confirmed seat; 3.3.1.2 CEAIR cancels an Agreed Stopping Place, which is the place of departure, place of destination or a

Stopover point of a Passenger; 3.3.1.3 CEAIR fails to properly operate a flight according to schedule; 3.3.1.4 CEAIR causes a Passenger’s failure to catch a connecting flight;3.3.1.5 CEAIR fails to provide a Passenger with the seat confirmed in advance. 3.3.2 If a Passenger, who has commenced his/her travel, fails to continue to travel within the duration of

validity of the Ticket by reason of illness, such Passenger shall provide a certificate of diagnosis issued by a medical institution (i.e. a domestic Grade III Class A hospital or above or a foreign hospital other than clinics or medical centers).

3.3.2.1 CEAIR may extend the duration of validity of the Ticket held by such Passenger to the date when the Passenger becomes fit to travel according to the certificate of diagnosis issued by doctors or to a soonest date after the aforesaid date in which the seats of the same class as purchased by the Passenger are available in a CEAIR flight. If a Ticket contains several Flight Coupons or the Flight Coupon of an Electronic Ticket combines one or more Stopover points, the duration of validity of such Ticket can be extended for no more than ninety (90) Days as of the date when the Passenger becomes fit to travel as indicated on the certificate of diagnosis issued by doctors.

3.3.2.2 CEAIR may extend the Tickets of the Passengers (2 persons at most) accompanying the sick Passenger to the same duration of validity as the sick Passenger.

3.3.3 In the event of death of any Passenger en route, the duration of validity of the Tickets held by the Passengers accompanying the defunct Passenger can be extended provided that any such extension shall be made upon receipt of the death certificate and the extended duration of validity of the Ticket shall be no longer than forty-five (45) Days from the date of the Passenger’s death.

3.3.4 If a Passenger is required to change any content of the carriage owing to a Force Majeure event, CEAIR will make every effort within a reasonable scope to carry the Passenger to the Stopover point or the place of destination indicated on the original Ticket without making any readjustment to the fare.

3.4 Loss and Mutilation of Paper Ticket3.4.1 In the case of loss or mutilation of a Ticket or any part thereof held by a Passenger, such Passenger shall

apply for reporting the loss of the Ticket to CEAIR in writing within the duration of validity of the Ticket.3.4.2 When reporting the loss of the Ticket, the Passenger is required to produce his/her Valid Identification

Certificates and a photocopy or fax copy of the issuer coupon of the lost Ticket. If the Passenger entrusts any other person for application, the applicant is required to produce his/her valid identification certificates together with the Valid Identification Certificates of the Passenger and any other materials and evidence as required by CEAIR.

3.4.3 CEAIR is not liable for any loss caused by any other person’s misuse or refund without permission of the Ticket before the application for reporting the loss of the Ticket.

3.4.4 In the case of loss of a Ticket, the Passenger’s application for reissuing a new Ticket shall be submitted within three (3) working days before the scheduled departure time of his/her flight, and any materials and evidence as specified in these Conditions shall be concurrently provided to CEAIR. After verifying the materials and evidence, CEAIR may reissue a new Ticket for the scheduled flight and charge fees for the reissuance of the Ticket if the following conditions are satisfied:

3.4.4.1 The Passenger shall fill in a Reissuance/Refund Application Form for Lost Ticket of CEAIR;3.4.4.2 The Passenger shall declare and agree to indemnify any and all losses so caused to CEAIR, including any

losses due to any other person’s misuse or refund without permission and any necessary litigation cost.3.4.5 In the case of the lost Ticket unverified and unapproved, CEAIR has the right to refuse the reissuance

of a new Ticket. In this case, the Passenger can only repurchase a new Ticket so as to get on board.3.4.6 A reissued Ticket is irrevocable and non-refundable.3.4.7 Tickets cannot be reissued in case of loss of any Open Ticket.3.4.8 If a lost Ticket has not been misused or refunded without permission within thirty (30) Days after the

expiry of the duration of validity thereof, CEAIR may make a refund and charge certain fees for the refund accordingly.

3.4.9 A Ticket cannot be used and refunded upon the application for reporting the loss. If the Passenger retrieves the lost Ticket or is informed of the whereabouts of the lost Ticket, the Passenger shall promptly inform the acceptance department of Ticket loss reports. If the Passenger retrieves the Ticket within the duration of validity thereof, the Passenger may make a refund at the acceptance department of Ticket loss reports.

3.5 Use Sequence of Flight Coupons3.5.1 The Passenger shall finish all the itineraries listed on the Ticket within the duration of validity thereof.3.5.2 If the first Flight Coupon of a Ticket has not been used and the Passenger requests for commencing

his/her travel from a Stopover point or an Agreed Stopping Place, CEAIR has the right to refuse to accept such Ticket. Such Ticket may be refunded in accordance with Article 111.5 hereof.

Article 4 Fares, Taxes and Charges4.1 Applicable Fares4.1.1 A fare refers to the fare for carriage by air from the airport at the place of departure to the airport at

the place of destination, not including ground transportation service fees generated from within the area of airport, between terminals, between airports or between airports and downtowns, civil aviation development fund, bunker adjustment surcharge, and any other taxes and charges imposed by the country of destination on the Passenger.

4.1.2 A fare refers to the applicable fare of the designated flight at the time that the Passenger purchases a Ticket. If CEAIR makes any adjustment to the fare after selling a Ticket, the fare paid by the Passenger for the purchase of the Ticket shall remain unchanged.

4.1.3 The Passenger paying for Special Fares shall abide by the conditions applicable to such Special Fares.4.2 Payment of Fares4.2.1 Fares shall be paid by Passengers in the currency of the country where Passengers are located and

subject to the payment method as required by CEAIR. Unless otherwise agreed by CEAIR and the Passenger, fares shall be paid in cash.

4.2.2 In the case that fares received by CEAIR are out of line with the applicable fare or are mistakenly calculated, the deficiency of fares shall be supplemented by Passengers or the overcharge thereof shall be returned by CEAIR.

4.3 Discount Fares4.3.1 A child Ticket shall be purchased for a Child Passenger with a fare at an appropriate ratio of the Normal

Fare for an adult, and CEAIR will provide the Child Passenger with a seat.4.3.2 An infant Ticket shall be purchased for an Infant Passenger with the equivalent of 10% of the Normal

Fare for an adult, and CEAIR will not provide the Infant Passenger with a seat. If the Infant Passenger is required to occupy a seat separately, the fare equivalent to a child fare shall be paid instead. If an adult Passenger carries more than one infant, the fare equivalent to a child fare shall be paid for each of the excess infants, and CEAIR will provide seats to such Infant Passengers.

4.4 Taxes and Charges To the extent permitted by applicable laws, any taxes or charges imposed by governments, relevant

authorities or airport operators shall be paid by the Passenger and will be listed on the Ticket respectively and CEAIR will inform the Passenger before his or her purchase of the Ticket of such taxes and /or charges which are not included in the normal fare.

4.5 Currency Fares, taxes and charges shall be payable in any currency acceptable to CEAIR. When payment is

made in a currency other than the currency in which the fare is published, such payment will be made at the rate of exchange ascertained by the country on the date of payment as notified by CEAIR.

Article 5 Reservations and Purchase of Tickets5.1 General Requirements5.1.1 A Passenger planning to take a CEAIR flight shall book a seat with CEAIR or a CEAIR Passenger

Sales Agent. A Reservation will be confirmed and valid only if the Passenger has produced relevant information and identification certificates as required by CEAIR and CEAIR has accepted the request for a specific flight designated by the Passenger.

5.1.2 If a Passenger fails to pay for the booked Ticket within the prescribed time limit, CEAIR may cancel his/her Reservation.

5.1.3 CEAIR shall reserve the seats booked by Passengers within the time limit provided for or agreed in advance by CEAIR, and shall provide Passengers with seats in the confirmed flight and class of services.

5.1.4 Passengers shall comply with the Minimum Connecting Time respectively prescribed by any relevant airport or Carrier when booking seats on interline flights; if the transfer time is out of line with the flight transfer time standards, CEAIR will not accept the Reservations.

5.1.5 CEAIR may impose restrictions on certain discount fares in order to limit or exclude Passengers’ rights to change or cancel Reservations.

5.1.6 CEAIR may suspend Reservations of a certain flight if necessary.5.2 Personal Information5.2.1 A Passenger acknowledges the accuracy of his/her personal information provided to CEAIR and will

assume any liabilities resulting from the inaccuracy of any information so provided. Such personal information is provided for the purpose of making Reservations, purchasing Tickets and obtaining relevant transportation services. CEAIR is authorized by the Passenger to retain and transmit the personal information to relevant governmental authorities at the place of destination, departments of CEAIR, other relevant Carriers or service providers.

5.2.2 A Passenger shall use the same Valid Identification Certificates when checking in and boarding as that used for Reservations and/or purchase of Tickets.

5.3 Reservation Priority5.3.1 CEAIR is entitled to prioritize the Reservations with respect to important Passengers, emergency

rescue, salvage, or any other Passengers in need of priority recognized by CEAIR.5.3.2 Passengers who involuntarily change their itineraries may enjoy reservation priority provided that

certain seats are available on the flight.5.3.3 Passengers holding Tickets of which seats are unconfirmed on all or part of the Flight Coupons have

no right to request for reservation priority when making Reservations.5.3.4 Passengers holding Tickets of which seats have been confirmed on all or part of the Flight Coupons

have no right to request for reservation priority when making changes in Reservations.5.4 Reconfirmation of Reservations5.4.1 Passengers do not need to reconfirm the confirmed seats on onward or return flights of CEAIR. 5.4.2 In an interline carriage, if a Passenger fails to reconfirm the seats on an onward or return flight as

required by any Carrier other than CEAIR, such Carrier is entitled to cancel the Reservations on such onward or return flights made by the Passenger.

5.4.3 Passengers shall check the seat reconfirmation requirements of any relevant Carrier and process the seat reconfirmation formalities with Carriers who introduce their airline codes on Tickets.

5.5 Cancellation of Reservations5.5.1 If a Passenger fails to purchase a Ticket within the time limit as prescribed or agreed in advance by

CEAIR, the Reservation of seats will not be retained, including seats on an originating flight, onward flight or return flight.

5.5.2 Any change or cancellation of a Reservation by a Passenger shall be produced within the time limit as prescribed by CEAIR. Any change or cancellation of a Reservation shall comply with the restriction conditions (if any) imposed on the fare.

5.5.3 If a Passenger fails to use the confirmed seat without notifying CEAIR, CEAIR will not be liable for any cancellation of seats so caused on the onward or return flights.

5.6 Purchase of Tickets5.6.1 Passengers may purchase Tickets at the ticket offices of CEAIR or CEAIR Passenger Sales Agents, or

on the official website of CEAIR (www.ceair.com). Passengers may also make inquiries and purchase Tickets through the CEAIR Hotline. The CEAIR Hotline number is 95530. Direct Marketing Service Hotline of CEAIR official website is 4008695530.

5.6.2 A Passenger shall complete the Passenger Reservation Document with his/her Valid Identification Certificates in order to purchase Tickets; in the case of purchasing Tickets through websites or CEAIR Hotline, a Passenger shall produce information to CEAIR as required, including his/her Valid Identification Certificates, contact number, etc.; the Passenger shall be liable for the authenticity of the foregoing information. The Passenger shall ensure that the Valid Identification Certificates used for purchasing Tickets are consistent with those used during check-in.

5.6.3 Valid Documents evidencing the birth dates of children and infants shall be produced for purchase of child and infant Tickets.

5.6.4 A Passenger in the following conditions shall produce a valid diagnosis certificate and fill in the Flight Application Form for a Special Passenger Named ( ) upon CEAIR’s consent before purchasing Tickets:

5.6.4.1 The Passenger who is pregnant for more than 32 weeks; or5.6.4.2 The Passenger who is travelling in a stretcher or incubator;5.6.4.3 The Passenger who needs medical oxygen during a flight; or5.6.4.4 The Passenger whose medical condition is such that there is a reasonable doubt that the individual can

complete the flight safely, without requiring extraordinary medical assistance during the flight. The diagnosis certificates shall be issued by the medical institutions (i.e. a domestic Grade III Class

A hospital or above or a foreign hospital other than clinics or medical centers) within 48 hours before the travel. The diagnosis certificate produced by a Passenger with serious disease (cardiovascular, cancer, acute trauma, etc.) shall remain effective for 24hours. A Passenger with more than 36 weeks of pregnancy shall not purchase Tickets.

5.6.5 Each Passenger shall respectively hold his/her own Ticket.5.6.6 If a Passenger pays the fare within the agreed ticketing time limit, CEAIR or a CEAIR Passenger Sales

Agent is responsible for issuing the Ticket.5.6.7 A Passenger who has paid the fare shall collect and verify the information on the Ticket or the Itinerary.5.6.8 If a Passenger requests for reserving the seat due to special circumstances, upon CEAIR’s consent, the

Passenger shall purchase the Ticket within the ticketing time limit indicated in the reservation records.5.6.9 A child under 5 years of age shall be accompanied by an adult with full capacity for civil conduct; if a

child who has reached 5 years of age but under 12 years of age wishes to take a flight accompanied, such child shall apply for carriage of unaccompanied children to CEAIR first and may purchase a Ticket upon CEAIR’s consent. An infant under 14 Days of age will not be accepted by CEAIR for carriage.

5.6.10 An adolescent Passenger between 12 and 15 years of age may take a flight alone, or may apply for carriage of unaccompanied children if necessary. A Passenger under 18 years of age shall not carry an infant or child alone.

5.7 Ticketing Time Limits If a Passenger fails to pay the fare within the ticketing time limit specified by CEAIR after the

Reservation, CEAIR or any CEAIR Passenger Sales Agent may cancel the Reservation.5.8 Seats Arrangement CEAIR reserves the right to reassign the seats which have been occupied by Passengers after

boarding due to flight or security reasons. (Please see Article 17.2 hereof)

Article 6 Overbooking6.1 According to the practice of carriage by air, CEAIR may conduct proper Overbooking for flights with

certain seats easily wasted as the case may be. In the event of Overbooking, CEAIR will notify the Passengers of the Overbooking situation, compensation plans and rights enjoyed by the Passengers before the Passengers check in.

6.2 In the event of Overbooking, CEAIR will properly compensate the Volunteers of Denied Boarding according to the compensation plans and arrange suitable flights or make refunds as required by them. Under the circumstances that not enough Passengers voluntarily give up boarding of the flight, CEAIR will refuse carriage of certain Passengers according to priority boarding rules ascertained by CEAIR.

6.3 If the Passengers being refused decide to continue the journey, CEAIR will arrange such Passengers to take the soonest flight in corresponding classes, and make appropriate compensation in line with relevant provisions based on the original flight and the delayed time.

Article 7 Check-in and Boarding7.1 General Provisions7.1.1 Check-in Closes Time is different at every airport and Passengers must arrive at the airport within the

time limit specified by CEAIR and go through formalities of verifying the Ticket, checking Baggage and obtaining the boarding pass with his/her Valid Identification Certificates and Ticket on time.

7.1.2 In avoidance of flight delays, CEAIR may cancel the confirmed seat of a Passenger who fails to arrive at CEAIR’s check-in counter or boarding gate or fails to produce his/her Valid Identification Certificates or carriage document. CEAIR shall not be liable for any losses or expenses caused by the Passenger’s failure to comply with the provisions of this Article.

7.1.3 CEAIR shall start check-in no later than 150 minutes before the scheduled Departure Time of the flight indicated on the Ticket, and close check-in 45 minutes before the scheduled Departure Time of the flight indicated on the Ticket, unless otherwise announced. (Please make inquiries through CEAIR Hotline 95530 for details).

7.1.4 CEAIR and CEAIR Ground Services Agents shall open check-in counters on time and duly process check-in formalities. Passengers and their Baggage must go through a security check before boarding the aircraft.

7.1.5 As for the commencement and closing of check-in for any onward connecting flight during the interline carriage, Passengers shall make inquiry with the Operating Carrier.

7.2 Seat Arrangements on the Aircraft7.2.1 Besides providing Passengers with the seats according to the confirmed flight and class of services,

CEAIR will endeavor to satisfy Passengers’ request for seat category in the same class of services but will not guarantee a particular seat on the aircraft requested by any Passenger.

7.2.2 To ensure flight safety, seats near the aircraft’s emergency exits shall be specifically arranged by CEAIR.7.2.3 For the purposes of operations, safety or security, CEAIR reserves the right to assign or reassign the seats on

the aircraft at any time, even after Passengers get on board the aircraft and/or are seated on the aircraft. 7.3 No-show of Passengers7.3.1 If a No-show occurs, a Passenger holding a Normal Fare Ticket shall change the flight or make a

refund at the airport of departure or the original ticketing place.7.3.2 If a Passenger requests to take a subsequent flight upon the occurrence of No-show, CEAIR will

arrange a seat for and charge certain fees to the Passenger as prescribed by the Regulation of CEAIR provided that there are available seats in the subsequent flight; if the Passenger requests for a refund, CEAIR may charge refund fees according to conditions applicable to such Ticket.

7.3.3 If a No-show occurs, a Passenger holding a Special Fare Ticket shall be subject to the applicable conditions to such Ticket.

7.4 Missing Flight of Passengers7.4.1 In the event of Missing Flight due to a Passenger’s reasons, the refund requested by the Passenger

shall be subject to the provisions on No-show. 7.4.2 In the event of Missing Flight due to CEAIR’s reasons, CEAIR shall arrange the soonest subsequent flight for

the Passenger to take, or process as specified in Article 111.4 of Involuntary Refunds under these Conditions.7.5 Wrong Plane of Passengers7.5.1 If a Passenger gets on board a wrong flight, CEAIR will arrange such Passenger to travel on the

soonest flight to the place of destination listed on the Passenger’s Ticket, with no overcharge to be returned or deficiency to be charged.

7.5.2 If the Passenger’s Wrong Plane occurs due to CEAIR’s reasons, CEAIR shall arrange the Passenger to travel on the soonest subsequent flight. The refund requested by the Passenger shall be subject to Article 111.4 of Involuntary Refunds under these Conditions.

7.6 Misconnection of Passengers In the case of Misconnection of the Passenger caused by CEAIR during an interline carriage, CEAIR,

as a preceding Operating Carrier, shall arrange for the Passenger at the connecting point.7.7 Boarding7.7.1 Passengers shall arrive at the boarding gate within the time limit as specified by CEAIR according to

the important notices on the boarding pass.7.7.2 CEAIR will cancel the Reservation made by a Passenger who fails to comply with Article 7.7.1 hereof

and fails to get on board the aircraft within the specified time limit before the closing of the aircraft door. CEAIR shall not be liable for any losses so caused to the Passenger.

Article 8 Baggage8.1 General Provisions8.1.1 Items Unacceptable as Baggage

Items specified in the Technical Instructions for the Safe Transport of Dangerous Goods by Air of the International Civil Aviation Organization (ICAO) and the Dangerous Goods Regulations of the International Air Transport Association (IATA), items the carriage of which are prohibited by the laws, regulations or orders of the People’s Republic of China, or items which are likely to endanger the aircraft or people or property on the aircraft as specified in the Regulation of CEAIR.

A Passenger shall not place in his/her Baggage or carry on to the cabin the following items, or otherwise CEAIR will refuse to provide carriage to the Passenger:

8.1.1.1 Items that do not constitute Baggage as defined in Article 1.40 of these Conditions;8.1.1.2 Dangerous goods (including without limitation):

(1) Explosives;(2) Gas, including flammable gas, inflammable and nontoxic gas, and toxic gas;(3) Flammable liquid;(4) Flammable solid, spontaneous combustible substance; substance that will release flammable gas in contact with water;(5) Oxidizer and organic peroxide;(6) Toxic substance and infectious substance;(7) Radioactive substance;(8) Corrosive substance;(9) Miscellaneous dangerous goods.

8.1.1.3 Firearms, ammunition, or military or police equipments (including key components), except those satisfying the requirements provided for in Article 1.1.18.1.3.9 of these Conditions.(1) Military guns or guns for official use: handgun, rifle, submachine gun, machine gun, baton gun, etc.(2) Civil guns: air gun, anesthesia gun, etc.(3) Other guns: sample gun, prop gun, etc.(4) Military equipments or police equipments: spontoon, military or police dagger or bayonet, etc(5) Guns or equipments prohibited by the PRC: Ball gun, tear gas gun, taser, defibrillator, or defense device;(6) Imitation of foregoing items.

8.1.1.4 Controlled Knives Knives listed in the Interim Provisions on Controlling Certain Knives promulgated by the Ministry of

Public Security, including daggers, knives with three edges (including fluted scraper used in machine work), knives with self-lock device, backswords similar with but longer than daggers, knives with double edges, and other similar backswords, knives with double edges, sharp knives with three edges, except those satisfying the requirements provided for in Article 1.1.18.1.3.1 of the Conditions;

8.1.1.5 Other Items(1) Items which are unsuitable for carriage by reason of their weight, size, package, shape or character;(2) Live animals: wild animals or/and animals with strange shape or easily to attack humans (i.e. snake), except those satisfying the requirements provide for in Article of the Conditions;(3) Fresh perishable items with obvious peculiar smell, such as durian, etc;(4) Items easily to defile the aircraft;(5) Magnetic substance;(6) Substance which makes people anesthetized or unpleasant, or substance with other similar nature;(7) Items unsuitable for carriage according to national laws and regulations or the Regulation of CEAIR.

8.1.1.6 Items prohibited from exiting from, entering into, or transiting in, relevant countries according to laws, regulations or orders of such countries.

8.1.2 Items Unacceptable as Checked Baggage A Passenger shall not include or place in Checked Baggage the following items: items which need

specific custody, such as cash, negotiable instrument, valuable securities, bill of exchange, fragile or vulnerable items, perishable items, jewelry, precious metal or articles thereof, gold and silver articles, antiques and valuable paintings, videos which are out of print, presswork or manuscripts which are out of print, samples and valuables, important documents and materials, diplomatic envelopes, travelling documents, computers and accessories, and personal communication devices and accessories, personal digital devices and accessories, etc., and prescribed drug that needs to be taken regularly. Please see liability for damage specified in Articles 12.118.3.4 and 12.118.3.8 hereof.

8.1.3 Restricted Items on Carriage8.1.3.1 Blunt, cold steel or similar items other than controlled knives may be carried as Checked Baggage,

provided that the package of the foregoing items shall be appropriate; and the foregoing items may not be carried into cabin.

8.1.3.2 Medicines or cosmetics which are necessary during the journey, such as drugs containing alcohol, hair conditioner or perfume.

8.1.3.3 Dry ice intended for perishable items.8.1.3.4 Alcoholic beverage.8.1.3.5 Toy guns shall be carried as Checked Baggage, and may not be carried into the cabin.8.1.3.6 Precise instrument, electronics, metals or batch objects shall be carried as cargo. Free Baggage

Allowance does not apply to such items.8.1.3.7 Liquid, gels and aerosols hand-carried by each Passenger shall be put in the container the capacity of which

is no more than 100 ML separately, and the total volume of the foregoing items shall not exceed 1 L.8.1.3.8 The electric wheelchair used by the Passenger during the journey.8.1.3.9 Firearms and ammunition for hunting and sporting purpose may be carried as Checked Baggage

with the firearms carriage license or the approval issued by relevant authorities of the State Council, but may not be carried into the cabin as Unchecked Baggage or carry-on items. Firearms must be unloaded with the safety catch on, and suitably packed. The carriage of ammunition shall be dealt with pursuant to relevant regulations on dangerous goods transportation.

8.1.3.10 Bulky musical instruments are not suitable to be carried as cargo. For the bulky musical instrument whose weight and size exceed the allowance of Unchecked Baggage, such musical instrument shall be charged separately as cabin-seat Baggage in the passenger cabin, and be taken care of by the Passenger.

8.1.3.11 Lithium battery may not be carried as Checked Baggage.8.1.4 Please visit the CEAIR’s official website (www.ceair.com) or inquire with CEAIR Hotline 95530 to find

more information on restricted items on carriage.8.2 Checked Baggage8.2.1 Upon delivery to CEAIR of Baggage to be checked, CEAIR will issue an Identification/Claim Baggage

for each piece of Checked Baggage.8.2.2 A Passenger shall attach his/her name or other personal mark to the Checked Baggage before

checking it in.8.2.3 Checked Baggage will be carried on the same aircraft as the Passenger, unless special circumstance

occurs, under which CEAIR will explain the situation to the Passenger and will carry it on a subsequent flight if the space on that flight is available.

8.2.4 Checked Baggage must be well packed with suitcase or other proper container, locked and bound, and must be able endure a certain amount of pressure, and can be safely loaded, unloaded and carried under normal operation conditions; CEAIR may refuse to carry as Checked Baggage, and/or not liable for damages or losses of, Baggage whose package does not meet the requirements.

8.2.5 Each Checked Baggage must not exceed 32kg in weight and the three dimensions shall not exceed 40cm, 60cm and 100cm. The carriage of Baggage exceeding the foregoing limit shall be subject to the prior consent of CEAIR.

8.3 Unchecked Baggage8.3.1 Each Unchecked Baggage must not exceed 10kg in weight and the three dimensions shall not exceed

20cm, 40cm and 55cm respectively.8.3.2 Unchecked Baggage should be stowed under the seat in front of the Passenger or in an enclosed

storage compartment in the cabin. Items exceeding the allowance of weight or size provided for in Article 8.3.1 hereof may not be carried into the cabin.

8.3.3 Each First Class Passenger is allowed to carry on up to two pieces of Unchecked Baggage; each Business Class or Economy Class Passenger is allowed to carry on up to one piece of Unchecked Baggage.

8.3.4 The Unchecked Baggage which exceeds the aforesaid allowance of weight, amount, or size shall be checked as Checked Baggage.

8.4 Free Baggage Allowance8.4.1 Free Baggage Allowance covers both Checked Baggage and Unchecked Baggage.8.4.1.1 Weight concept of Free Baggage Allowance: the Free Baggage Allowance for an adult Ticket or a child

Ticket in First Class is 40kg; the Free Baggage Allowance for a Business Class Passenger is 30kg; and the Free Baggage Allowance for an Economic Class Passenger is 20kg. The Free Baggage Allowance for each infant Ticket is 10kg. Each infant is allowed one checked stroller free of charge.

8.4.1.2 Piece concept of Free Baggage Allowance: The Free Baggage Allowance for an adult Ticket or a child Ticket in First Class or Business Class is two pieces, for which the sum of the three dimensions must not exceed 158cm for each piece, and the weight of each piece must not exceed 32kg. The Free Baggage Allowance for an Economy Class Passenger is two pieces, for which the sum of the three dimensions must not exceed 158cm for each piece, and the weight of each piece must not exceed 23kg. The Free Baggage Allowance for an infant Ticket is one piece, for which the sum of the three dimensions must not to exceed 115cm, and the weight must not exceed 23 kg, plus one checked stroller.

8.4.2 When two or more Passengers, traveling as one group to the same place of destination by the same flight, check their Baggage at the same place, the Passengers shall be permitted a total Free Baggage Allowance equal to the combination of their individual Free Baggage Allowance ascertained by their respective fares and categories.

8.4.3 When a Passenger takes the flight with different concepts in the Free Baggage Allowance, the Free Baggage Allowance shall be calculated based on the standards of limited weight or pieces indicated in the Ticket.

8.4.4 Where a voluntary change of itinerary is made, a Passenger shall be entitled to the Free Baggage Allowance applicable to the class of services shown on the Ticket after the change of itinerary.

8.4.5 Where an involuntary change of class is made, a Passenger shall be entitled to the Free Baggage Allowance applicable to the class of services shown on the original Ticket.

8.4.6 Free Baggage Allowance for an interline carriage shall be calculated according to the Regulation of CEAIR and relevant regulations of International Air Transport Association (IATA).

8.4.7 Small animals (except for service dogs carried by a Passenger with a disability) as well as their containers and food to be carried shall not be covered by Free Baggage Allowance. They can only be carried as excess baggage. The Passenger shall pay for the weight of small animals as well as their containers and food based on the applicable excess baggage charge rate.

8.4.8 Assistive Device for Individual with a Disability Passenger (including but not limited to wheelchairs) shall not be covered under the Free Baggage Allowance, and may be carried free of charge.

8.5 Excess Baggage Charge8.5.1 The excess baggage means that portion by which the Checked Baggage and Unchecked Baggage

exceed the Free Baggage Allowance. Passengers shall pay for excess baggage.8.5.2 An excess baggage ticket will be issued to the Passenger in the case that excess baggage is charged.8.5.3 Excess Baggage Charge Rate8.5.3.1 Weight concept: every kilogram in excess will be charged on the basis of 1.5% of the Ticket fare

applicable to the adult in the Economy Class of one-way direct flight on the boarding date.8.5.3.2 Piece concept: excess baggage charge rate will be calculated on the applicable fixed charge rate

published in the Passenger Air Tariff (PAT) of International Air Transport Association (IATA).8.5.3.3 The charges will be received in the currency of the local country or region, with the number before

decimal point left and mantissa rounded up.8.6 Declaration of Baggage Value8.6.1 A Passenger may declare a value for Checked Baggage in excess of USD 20 per kilogram.8.6.2 The declared value of the Checked Baggage shall not exceed the actual value of such Baggage. The

maximum declared value of Baggage for each Passenger is USD 2,500 (A Passenger may purchase any other commercial insurance to cover the Baggage value in excess of such maximum). CEAIR may refuse the acceptance and carriage of the Baggage if CEAIR disagrees with the declared value or the Passenger refuses to accept to be checked.

8.6.3 CEAIR will introduce a surcharge for the declared value of Baggage of 5‰ of the amount in excess of the limitation provided in Article 8.6.1 with the Baggage declared value. Such surcharge shall be denominated in Renminbi (Yuan), the decimal places of which shall be rounded-off.

8.6.4 CEAIR shall only accept the Baggage declared value with respect to the Checked Baggage of CEAIR’s flights.

8.6.5 CEAIR will not accept the Baggage declared value with regard to Unchecked Baggage, carry-on items, small animals and cabin-seat Baggage.

8.6.6 The Baggage declared value will not be counted into Free Baggage Allowance.8.7 Inspection For the purpose of safety and security, CEAIR may conduct a security check, scan or X-ray inspection

to a Passenger’s Baggage jointly with any other competent department, during which the Passenger shall be on the spot; CEAIR will not be liable for any damage attributable to the Passenger’s absence after being notified of the Baggage Check. If a Passenger refuses to accept to be checked, CEAIR may refuse to carry such Passenger or his/her Baggage.

8.8 Acceptance of Baggage8.8.1 A Passenger shall check Baggage with a valid Ticket, and CEAIR will fill in the pieces and/or weight of

the Checked Baggage in his/her Ticket and Baggage Check.8.8.2 CEAIR will only accept Baggage during check-in on the date of flight departure. A Passenger may

request CEAIR to accept Checked Baggage in advance after obtaining CEAIR’s consent in advance.8.8.3 CEAIR shall attach a baggage tag to each piece of the Passenger’s Checked Baggage and offer

the Identification/Claim Baggage thereof to the Passenger; Unchecked Baggage shall, after weighed along with Checked Baggage, recorded in the Baggage Check and attached Unchecked Baggage tags, be taken with and stored by the Passenger in the cabin.

8.8.4 If any Checked Baggage is likely to give rise to any dispute on carriage liability, CEAIR may attach a baggage tag with a disclaimer to such Checked Baggage with the Passenger’s written consent; CEAIR will not be liable for any damage caused to such Baggage during carriage; if not, CEAIR may refuse the carriage of such Baggage.

8.8.5 Assistive Device for Individual with a Disability Passenger shall not, except for the part which has been damaged prior to the Passenger’s delivery for carriage, be entered into a disclaimer.

8.9 Small Animals8.9.1 Carriage of dogs, cats, domesticated birds and other small animals can be accepted provided that a

Passenger introduces such carriage to CEAIR when making the Reservation and CEAIR’s consent has been obtained in advance. Carriage of small animals shall be processed by successive Carriers subject to the consents from successive Carriers concerned. Small animals shall be properly crated and accompanied by valid health and vaccination certificates and documents required by countries of entry and transit. The Passenger shall be liable for the authenticity of the aforesaid documents, including but not limited to any penalty or loss so incurred to the Passenger or CEAIR.

8.9.2 Small animals can only be loaded in cargo bay during carriage. A Passenger shall carry and check small animals at the airport on the date of flight departure.

8.9.3 Small animals, together with the containers and food, shall not be counted into Free Baggage Allowance of the Passenger. (Please see Article 8.4.5 hereof)

8.9.4 Except for any fault attributable to CEAIR, a Passenger shall be fully liable for any illness, escape, injury or death of the checked small animals during carriage.

8.9.5 The containers for small animals shall be subject to CEAIR’s requirements.8.9.6 Assistance dogs, guide dogs and hearing dogs may be carried with the Passengers with a disability

in the cabin subject to CEAIR’s carriage conditions. Assistance dogs, guide dogs and hearing dogs, along with their containers and food, can be carried free of charge and will not be counted into Free Baggage Allowance.

8.9.7 CEAIR may limit the number of small animals to be checked and determine the carriage of small animals for each aircraft.

8.9.8 A Passenger shall be fully liable for any and all damage or injury to any other Passenger or CEAIR which may be caused by small animals, including assistance dogs, guide dogs and hearing dogs.

8.10 Diplomatic Envelopes8.10.1 Diplomatic envelopes shall be carried with and attended by diplomatic couriers. As requested by

diplomatic couriers, diplomatic envelopes can also be checked as Checked Baggage, provided that CEAIR will be liable, in accordance with the liabilities for normal Checked Baggage, for any Damage or loss of diplomatic envelopes during carriage.

8.10.2 Diplomatic envelopes and Baggage carried by diplomatic couriers may be weighed collectively or separately; Baggage in excess of Free Baggage Allowance shall be subject to Article 8.5 of excess baggage charge under these Conditions.

8.10.3 Request for cabin seats for placing diplomatic envelopes can be accepted provided that a Passenger introduces such request to CEAIR when making the Reservation and CEAIR’s and other relevant Carriers’ consents have been obtained in advance.

8.10.4 Diplomatic envelopes in each seat shall not exceed 75 kilograms in total weight and 40×60×100cm in total size. No Free Baggage Allowance shall be granted to any cabin-seat diplomatic pouch, Tariff shall be calculated in the following way and the higher figure shall be paid:

8.10.4.1 The actual weight of cabin-seat diplomatic envelopes shall be translated into the excess Baggage and be calculated according to the provisions on excess Baggage;

8.10.4.2 The seats occupied by diplomatic envelopes shall be translated into the fares of the same class and be calculated according to the places of departure and destinations during carriage.

8.10.5 This Article hereof shall apply to confidential documents carried by confidential transportation personnel.8.11 Unacceptable Baggage If any item unacceptable for baggage carriage or prohibited articles, dangerous articles prescribed by

any country or restricted articles without CEAIR’s permission for carriage is included in the Baggage of any Passenger, the whole piece of Baggage will be regarded as unacceptable baggage. CEAIR will dispose of such unacceptable baggage in the following ways:

8.11.1 CEAIR may refuse to carry unacceptable baggage upon discovery at the place of departure; if the carriage has commenced, CEAIR has the right to cancel continued carriage and the charges paid for excess Baggage will not be refunded.

8.11.2 CEAIR shall stop carrying unacceptable baggage upon discovery at a stopping place, and the charges paid for excess Baggage will not be refunded.

8.11.3 Any prohibited articles, restricted articles or dangerous articles prescribed by any country shall be turned in to the competent governmental authorities upon discovery of any unacceptable baggage.

8.12 Return of Baggage8.12.1 If a Passenger requests for return of Baggage at the place of departure, the Passenger shall introduce

such request to CEAIR before Baggage being loaded. If a Passenger applies for a refund, the accepted Baggage shall also be returned.

8.12.2 If a Passenger requests for return of Baggage at a stopping place, such request may be accepted unless time does not permit; but the charges paid for excess Baggage during the unused flight segments will not be refunded.

8.12.3 In the case of return of Baggage with value declared, a surcharge paid for the Baggage declared value will be refunded if the return of Baggage is made at the place of departure, but will not be refunded if the return of Baggage is made at a stopping place.

8.12.4 If a Passenger is arranged to switch to other flights due to CEAIR’s reasons, carriage of his/her Baggage shall be adjusted accordingly. Overcharge or deficiency for the charges of excess Baggage will be returned or supplemented by CEAIR, but the surcharge paid for the Baggage declared value will not be refunded.

8.13 Delivery of Checked Baggage8.13.1 A Passenger shall promptly claim his/her Baggage by producing the Identification/Claim Baggage at

the airport upon the flight arrival. The Ticket shall be presented and checked if necessary.8.13.2 Unless otherwise as stipulated by laws, the Checked Baggage shall be presumed to have been

delivered in good condition according to the contract of carriage if the Passenger fails to propose any written claim upon delivery.

8.13.3 CEAIR will deliver Baggage according to the Identification/Claim Baggage and is under no obligation to ascertain whether or not the person who collects the Baggage is the Passenger, and any loss or cost

so caused shall be borne by the Passenger.8.13.4 If the Passenger fails to produce the Identification/Claim Baggage when collecting Baggage, such Passenger

shall provide sufficient evidence to prove his/her ownership to the Baggage. CEAIR may require the Passenger to issue an undertaking if necessary, in which the Passenger shall commit to assume any loss or cost which may be incurred CEAIR with regard to the delivery of the aforesaid Baggage.

8.13.5 If a Passenger fails to collect his/her Baggage in a timely manner, CEAIR will charge the Passenger for baggage custody fees from the date after the Baggage arrival. CEAIR may to dispose of the perishables in the Passengers’ Baggage 24 hours after the Baggage arrival for the sake of public health.

8.13.6 In the case of delay of Baggage, CEAIR shall promptly notify the Passenger for collection or directly deliver to the Passenger upon arrival unless the Passenger is required to process the customs formalities or the inspection and quarantine formalities in person on the spot according to applicable laws.

8.13.7 If the Baggage has not been collected within ninety (90) Days from the date after the Baggage arrival, CEAIR may dispose of such Baggage in accordance with the relevant provisions undeliverable Baggage and will not be liable for any loss to the Baggage.

8.13.8 Checked Baggage may only be delivered at:8.13.8.1 The place of destination indicated on the Ticket;8.13.8.2 The first Stopover point during the carriage;8.13.8.3 The connecting place where the Passenger is switched to a continuing flight run by any other Carrier

who has not entered into an interline carriage agreement with CEAIR or applies different provisions on carriage of Baggage from those of CEAIR;

8.13.8.4 The destination of the interline flight with a confirmed seat;8.13.8.5 The arrival airport of the connecting place of the interline flight;8.13.8.6 The place where the Passenger is required to collect all the Baggage;8.13.8.7 The place indicated on the Ticket where the charge for the excess Baggage has been paid up;8.13.8.8 The place where the customs formalities shall be processed before the carriage can be continued as

prescribed by relevant countries.8.14 Compensation for Baggage 8.14.1 In the event of any delay, loss or damage to Baggage during carriage, CEAIR and CEAIR Ground

Services Agents shall fill in the Irregular Baggage Carriage Records or Baggage Damage Records along with the Passenger and shall reply to the Passenger regarding the investigation result in a timely manner. Any claim for Baggage compensation can be proposed at the place of departure, stopping places or the place of destination.

8.14.2 If the Checked Baggage fails to arrive in the same aircraft with the Passenger due to CEAIR’s reasons and such failure causes any inconvenience to a non-resident Passenger, CEAIR will pay a compensation for temporary articles for daily use to such Passenger according to the Regulation of CEAIR.

Article 9 Flight Schedules, Delays and Cancellations9.1 CEAIR will use its best efforts to properly carry a Passenger and Baggage in accordance with

the published schedule in effect on the date of travel. CEAIR will when accepting a Passenger’s Reservation of seats and/or purchase of Tickets notify the Passenger of the flight times which will also be showed on the Tickets. After issuance of the Tickets, CEAIR may make changes in the scheduled flight time. CEAIR will notify the Passengers of the changes in the flight schedule through the contact details provided by the Passengers. If the Passengers cannot accept such changes in the flight schedule made by CEAIR and CEAIR fails to arrange another alternative flight which is acceptable to the Passengers, the Passengers may apply for a refund in accordance with Article 111.4 on Involuntary Refunds under these Conditions.

9.2 The flight schedule and aircraft types shown in timetables or any other documents only refer to the scheduled flight times and aircraft types but not the guaranteed flight times and aircraft types, which will not constitute part of the contract of carriage entered into between CEAIR and the Passengers.

9.3 Except in the case of damage caused by CEAIR’s imprudent act or omission attributable to CEAIR’s intention or full awareness of such damage, CEAIR will not be liable for any mistake or omission in the flight timetable or any other published schedules. CEAIR will not be liable for any interpretation on time or date of departure or arrival, or carriage of any flight adopted by CEAIR’s employees, agents or representatives.

9.4 Rerouting, Delays and Cancellation of Flights CEAIR will take every necessary measure to avoid any delay in carrying a Passenger and the

Passenger’s Baggage. CEAIR will not be liable if CEAIR has taken every necessary measure or it is not possible for CEAIR to take such measures to avoid such delay.

9.5 If any of the following circumstances occurs, CEAIR may, without notice in advance, change aircraft type or flight routes, or cancel, suspend, postpone or defer any flight, subject to Article 9.6 hereof:

9.5.1 In order to comply with laws, administrative regulations, orders and requirements of any country;9.5.2 In order to ensure safe operation of a flight;9.5.3 Any other reasons beyond CEAIR’s control or unpredictable by CEAIR.9.6 Due to any reason prescribed in Article 9.5, if CEAIR cancels or causes any flight delayed, fails to

provide Passengers with the reserved seats (including the classes), fails to stop at the Passenger’s stopping place or destination, or causes a Passenger to miss a connecting flight on which the Passenger has a confirmed seat, CEAIR shall, considering the Passenger’s reasonable requests, take any of the following measures at the Passenger’s choice:

9.6.1 CEAIR will arrange the subsequent non-stop flights with available seats for the Passenger or extend the duration of validity of the Passenger’s Ticket free of charge.

9.6.2 CEAIR will make a change in the flight shown on the original Ticket and arrange other CEAIR’s flights to carry the Passenger to the destination or stopping place, any overcharge for the fare or the excess Baggage will be returned but any deficiency thereof shall not be supplemented;

9.6.3 The Passenger will be endorsed to other Carriers after agreed by the Passenger and the endorsed Carrier;9.6.4 As prescribed in Article 111.4 on Involuntary Refunds under these Conditions.9.7 If any circumstance in Article 9.5 hereof occurs, the remedies provided for from Articles 9.6.1 to 9.6.4

shall be all the alternative remedies available to a Passenger provided that CEAIR may be required to assume any other liability as prescribed by applicable laws and provisions under these Conditions (Please see Article 119.2 and 119.3 hereof).

9.8 CEAIR may, at its reasonable discretion and for purpose of operation demands, change or cancel the stopping places indicated in the Tickets or schedules, and substitute any other Carrier or aircraft without notice in advance.

9.9 In the event of reduction in carrying capacity which is not attributable to CEAIR, CEAIR may, at its reasonable discretion, refuse to carry any part of Passengers or Baggage. Under such circumstance, CEAIR shall provide such Passengers with subsequent carriage service, Ticket changes or refunds service according to the Regulation of CEAIR, but shall not assume any other liability.

9.10 Assistance in Irregular Flights9.10.1 If any flight is delayed or cancelled due to any reason of aircraft maintenance, flight deployment,

business or crew, CEAIR and CEAIR Ground Services Agents shall provide the flight dynamic information to the Passengers and arrange food and/or accommodation services for the Passengers. The aforesaid services may be independently provided by any person other than CEAIR; as such, the Passengers may choose whether to accept such services, and any cost so incurred will be borne by CEAIR.

9.10.2 If any flight is delayed or cancelled due to any reason which is not attributable to CEAIR, including weather, emergency (including flight security failure), air traffic control, security check and Passengers, CEAIR and CEAIR Ground Services Agents shall provide the flight dynamic information to the Passengers and assist the Passenger in arranging food and/or accommodation services, and any cost so incurred will be borne by the Passenger.

9.10.3 If any CEAIR’s flight is delayed or cancelled at a stopping place for reasons whatsoever, CEAIR shall provide Passengers with food and/or accommodation services.

Article 10 Refusal to Transport and Limitation of Carriage10.1 Refusal to Transport CEAIR may refuse to transport any Passenger or Passenger’s Baggage for air carriage safety reasons

or if CEAIR, in the exercise of its reasonable discretion, determines any of the following circumstances has occurred:

10.1.1 The carriage violates any applicable laws, governmental regulations and orders of any country;10.1.2 The conduct, age, mental or physical state of a Passenger is not suitable for carriage by air or may

threaten or harm such Passenger or other people or the properties thereof;10.1.3 Any Passenger fails to comply with the Regulation of CEAIR or any arrangements and instructions of

CEAIR’S crew;10.1.4 Any Passenger refuses to submit to Passenger or Baggage security check;10.1.5 Any Passenger fails to pay for the Ticket, taxes or applicable charges, or the Passenger or the Ticket

payer fails to comply with the credit arrangements between CEAIR and them;10.1.6 Any Passenger fails to produce Valid Identification Certificates; or the Valid Identification Certificates

produced by the Passenger are different from the Valid Identification Certificates used for purchasing the Electronic Ticket;

10.1.7 Any Passenger fails to use the Flight Coupon according to the sequence thereof;10.1.8 Any Passenger fails to produce a valid Ticket, including:10.1.8.1 The Ticket is illegally obtained or purchased from any person other than CEAIR or any CEAIR

Passenger Sales Agent;10.1.8.2 The Ticket has been reported lost;10.1.8.3 The Ticket is a counterfeit;10.1.8.4 The Flight Coupon has been modified, altered or damaged without CEAIR or any CEAIR Passenger

Sales Agent’s permission;10.1.8.5 The Ticket holder fails to prove he is the person named in the Name of Passenger;10.1.9 Any Passenger may seek to enter into a country through which the Passenger may be in transit,

destroy his/her travel documents during flight, or refuse to surrender his/her travel documents to the flight crew, against receipt, when requested;

10.1.10 Carriage of the Passenger’s Baggage violates any applicable laws, regulations, orders or instructions of any country of departure, country of termination or country of Agreed Stopping Place;

10.1.11 Any Passenger’s Baggage may threaten or affect the security and health of the crew or other Passengers.

10.2 Limitation of Carriage Carriage of special Passengers, including infants, unaccompanied children, medical patients, disabled

passengers, pregnant women or convicts (including criminal suspects), may only be accepted subject to the Regulation of CEAIR and other Carriers’ regulations and with CEAIR and other Carriers’ consent in advance and arrangements if necessary.

10.3 Refunds after Refusal of Carriage A refund can be made to any Passenger who has been refused of carriage for any reason specified in

this Article in accordance with Article 111.5 hereof.

Article 11 Refunds11.1 General Provisions11.1.1 In the case of unused part of or all of the flight segments of CEAIR Tickets held by Passengers within

the duration of validity, CEAIR may, subject to all the applicable conditions of CEAIR Tickets, accept the refund application.

11.1.2 Except as otherwise provided in this Article, CEAIR shall make a refund of the fare to Passengers, payers or trustees named in the Tickets by the payment method shown on the Tickets.

11.1.3 Except in the case of lost Tickets, paper Tickets for refunds shall include complete Flight Coupon and Passenger Coupon for unused flight segments, and Passengers shall produce the originals of Valid Identification Certificates used for purchasing the Tickets when applying for refunds. If Passengers entrust any other persons to apply for refunds, such trustees shall produce power of attorneys, Valid Identification Certificates of Passengers named on the Tickets, Valid Identification Certificates of the principals (or photocopies thereof) and the Tickets.

11.1.4 A refund made by CEAIR to any person who holds all Flight Coupon, Passenger Coupon and payment vouchers for unused flight segments and who meets the requirements in Articles 11.1.2 and 11.1.3 hereof shall be deemed as a proper refund and shall discharge CEAIR from the contract of carriage entered into with the Passenger.

11.1.5 Refunds on Lost Tickets In the case of the whole or part of the Ticket lost, if a Passenger has provided evidence of lost Ticket

satisfactory to CEAIR and paid up all the applicable service charges within the prescribed time limit, CEAIR will make a refund to the Passenger upon expiry of the duration of validity of the Ticket provided that all the following conditions have been met:

11.1.5.1 CEAIR has received the fare of the lost Ticket.11.1.5.2 The lost Ticket has not been used or refunded before the refund application, and CEAIR has not

reissued a new Ticket without the Passenger paying the extra fare.11.1.5.3 The Passenger shall fill in the Reissuance/Refund Application Form of Lost Tickets provided by

CEAIR.11.1.5.4 The Passenger shall undertake to indemnify CEAIR against any and all losses that may be incurred

by CEAIR in connection therewith, including any loss caused or to be caused due to any other person’s misuse or refund without permission and necessary litigation costs.

Any misuse or refund without permission of a lost Ticket or purchase of a replacement Ticket, which is due to any CEAIR’s fault shall be excluded from indemnification.

11.2 Time Limit for Refund A refund must be applied no later than thirteen (13) months after the commencement date of the first

carriage (or the Ticket filling date, if the first flight segment has not been used). CEAIR will not accept a refund application after the expiry of the aforesaid time limit.

11.3 Place of Refund11.3.1 In the case of a Voluntary Refund applied by a Passenger, the refund application shall be processed at

the original ticketing place of the Ticket.11.3.2 In the case of an Involuntary Refund applied by a Passenger, the refund application can be processed

by a CEAIR Passenger Sales Agent at any place of the original purchase place of the Ticket, place of departure, stopping place, any CEAIR ticket office at the place of arrival or the place where the incident triggered the Involuntary Refund.

11.3.3 In the case of refund of an Electronic Ticket purchased on CEAIR’s official website, the Passenger shall submit the application for refund through CEAIR’s official website.

11.4 Involuntary Refunds If any circumstance under Article 3.3.1 hereof causes a Passenger to apply for a refund, the amount of

the refund shall be:11.4.1 If the Ticket has not been used, an amount equal to the full fare and taxes with no charges for refund service;11.4.2 If the Ticket has been partly used, an amount including the higher between the remainder of the paid

fare with the fare applicable to the used flight segments deducted and the fare of the unused flight segments, which shall not exceed the original paid fare of the Ticket, and the unused taxes to be refunded with no charges for refund service.

11.5 Voluntary Refunds If a refund is allowed to be made on a Ticket for reasons other than those set out in Article 11.4, the

amount of the refund shall be:11.5.1 If the Ticket has not been used, an amount equal to the balance of the Ticket and taxes with the

charges for refund service deducted;11.5.2 If the Ticket has been partly used, an amount equal to the remainder paid with the fare applicable to the

used flight segments, taxes and charges for refund service deducted;11.5.3 If the fare applicable to the used flight segments is higher than or equal to the full fare, an amount equal

to the taxes applicable to the unused flight segments with no refund of the fare of the unused flight segments to be made to the Passenger.

11.6 Refund Service Fees11.6.1 CEAIR may charge a Passenger for refund service fees. In the case of a refund made to a Passenger,

CEAIR shall charge the Passenger for the refund service fees in accordance with Article 11.5 hereof.11.6.2 A refund for an infant Ticket equal to the 10% fare of a regular Ticket shall not be charged any refund

service fees. A refund for a child Ticket shall be charged at the refund service fees applicable to refund for adult Tickets.

11.6.3 No refund service fees will be charged for a refund due to the Passenger’s illness if the Passenger can provide with a certificate of diagnosis issued by (a domestic Grade III Class A hospital or above or a foreign hospital other than clinics or medical centers) demonstrating that the Passenger is not suitable for the carriage of the flight showed on the Ticket. A refund applied by the companions of a sick Passenger shall not be charged of refund service fees (2 persons at most), provided that such companions have submitted photocopies of the Ticket of the sick Passenger and relevant supporting documents, and have also applied for the refund concurrently with the sick Passenger’s application for refund.

11.6.4 A refund due to a Passenger’s death in the trip, if any person other than the Passenger when processing the application provides a death certificate issued by the Public Security Bureau or armed police force, shall not be charged of refund service fees. A refund applied by the companions of the defunct Passenger shall not be charged of the refund service fees, provided that such companions have submitted photocopies of the defunct Passenger’s Ticket and relevant supporting documents, and have also applied for the refund concurrently with the defunct Passenger’s application for refund. Such refund shall be made no later than forty-five (45) Days after the Passenger’s death.

11.6.5 A refund for a Special Fare Ticket, unless otherwise stipulated herein, shall be charged of refund service fees in accordance with Article 11.5 hereof.

11.7 Refusal of Refund11.7.1 If a Passenger voluntarily terminates his/her trip at a stopping place of the flight, a refund on the fare of

the unused flight segments will not be allowed.11.7.2 In the case of the Tickets indicated as non-refundable or no balance refundable, a refund on taxes can

be solely made with no charges for refund service.11.7.3 CEAIR reserves the right to retain any forged or counterfeit Tickets without making a refund or

reimbursement.11.7.4 Unless otherwise specified herein, CEAIR may refuse to make any refund if such refund is applied later

than thirty Days after the expiry of the duration of validity of the Ticket.11.7.5 CEAIR will refuse to make any refund on a Ticket purchased by a Passenger which indicates an arrival

place where the Passenger is refused entry or subject to deportation.11.8 Currency of Refund11.8.1 Any refund shall comply with the laws and other regulations of the country where the Ticket is originally

purchased and of the country where the refund is being made. CEAIR generally makes a refund in the same currency as was originally used to pay for the Ticket, and can as well make a refund in the currency of the country where the Ticket is originally purchased or of the country where the refund is being made.

11.8.2 A refund for a Ticket paid with credit cards or by other non-cash methods of payment can only be credited to the payment card account originally used for the Ticket purchase.

11.8.3 A Passenger shall not claim for a refund on such difference against CEAIR based on differences resulting from changes in foreign exchange rates.

Article 12 Change of Tickets12.1 If Passengers require for a change in classes after purchasing tickets, CEAIR and CEAIR Passenger

Sales Agents may arrange for Passengers if there are available seats on the flight and time permits.12.2 Downgrading Passengers’ Classes12.2.1 If Passengers voluntarily downgrade their classes, Passengers may apply for refund on the original

Tickets according to Article 11.5 hereof and then repurchase new Tickets.12.2.2 Passengers’ classes are involuntarily downgraded: if the classes enjoyed by Passengers are lower than

the classes shown on the Tickets, CEAIR shall refund to Passengers the corresponding difference.12.3 If Passengers request for a change in flights and dates after purchasing the Tickets, CEAIR and CEAIR

Passenger Sales Agents may, in accordance with the applicable conditions of the Tickets held by the Passengers including the fare regulations, arrange for the Passengers if there are available seats on the flight and time permits; the differences in the Tickets fares and any other costs so incurred shall be

borne by the Passengers.12.4 If Passengers request for a change in Carriers after purchasing the Tickets, CEAIR may, in accordance

with the applicable conditions of the Tickets held by the Passengers, process the endorsement of Tickets for the Passengers who shall be carried by CEAIR or hold Tickets issued by CEAIR provided that such Ticket must be free from restrictions on endorsement.

12.5 If Passengers, holding CEAIR Tickets or Tickets containing CEAIR flight segments but not issued by CEAIR, request for a change in the scheduled Carriers of certain flight segments due to their own reasons, CEAIR may, subject to the applicable conditions of the Tickets, process the endorsement after CEAIR’s consent, which is limited to the Tickets of the same class in the flights owned by the airlines who have entered into settlement agreements with CEAIR. Article 11.5 on Voluntary Refund shall apply if the conditions set forth in Article 12.3 hereof are not met and the conditions for Passengers requesting a change in the Carriers set forth in this Article 12.5 are not met.

12.6 CEAIR Passenger Sales Agents, without authorization from CEAIR, shall not process the endorsement of Tickets for any Passenger.

Article 13 Passengers Services13.1 When flight delays or cancellations occur, CEAIR, CEAIR Passenger Sales Agents and CEAIR

Ground Services Agents shall promptly notify Passengers of such flight delays or cancellations.13.2 In the case of flight delays due to CEAIR’s reasons, CEAIR shall provide Passengers with food and

beverage services and accommodations free of charge. In the case of flight delays or cancellations which are not attributable to CEAIR, CEAIR will assist Passengers in contacting with and arranging for food and beverage services and accommodations, any cost arising from which shall be borne by Passengers.

13.3 If any CEAIR’s flight is delayed or cancelled at a stopping place for reasons whatsoever, CEAIR shall provide Passengers with food and/or accommodation services.

13.4 CEAIR shall provide Passengers with food and beverage services free of charge according to the Regulation of CEAIR and standards during carriage by air. CEAIR may charge for any other services beyond the Regulation of CEAIR if requested by Passengers.

13.5 Any costs for on-the-ground food and beverage services and accommodations incurred at the connecting places of a interline flight shall be borne by Passengers.

Article 14 Services Provided by Third Parties14.1 If CEAIR makes arrangements for Passengers with any third party to provide any services other than

carriage by air, or if CEAIR issues a ticket or voucher relating to transportation or services (other than carriage by air) provided by a third party, such as ground transportation, hotel reservations or car rental, CEAIR does so only as Passengers’ and/or the third party’s agent and terms and conditions of the third party service provider will apply.

14.2 Given that CEAIR provides combined ground transportation, and transportation performed partly by carriage by air and partly by other methods of transportation, these Conditions shall only apply to carriage by air as prescribed in Articles 1.2 and 1.3 hereunder; however, these Conditions shall, in the absence of contrary evidence, also apply to ground transportation if other methods of transportation are used during the course of performing a contract of air carriage.

14.3 These Conditions will not affect the terms and conditions regarding transportation of any other kind on air carriage documents listed by any party of combined transportation provided that such party complies with the provisions on carriage by air under these Conditions.

Article 15 Conduct Aboard Aircraft15.1 In the event of any following conduct taken by a Passenger on the aircraft, CEAIR may take measures

as CEAIR deems necessary to prevent any such conduct, including restraint or forced alighting at any place of such Passenger:

15.1.1 Endangering the aircraft or any person or property on board;15.1.2 Obstructing the crew in the performance of their duties;15.1.3 Failing to comply with any arrangements and instructions of the crew;15.1.4 Smoking, excessive drinking or drug consumption;15.1.5 Conducts that cause or threaten to cause discomfort, inconvenience, damage or injury to, or fair

objection from other Passengers.15.2 Electronic Devices Except for hearing aids, heart pacemakers, and respiratory assistive devices (excluding those devices

which may threaten the safety of flight pursuant to applicable laws and government regulations), without permission of the CEAIR crew, Passengers are forbidden to use any electronic equipment on board the aircraft, including but not limited to laptop computers, portable recorders, portable radios, electronic games or transmitting devices, including radio controlled toys, wireless cards, cellular telephones and walkie-talkies.

15.3 Non-smoking Flights All CEAIR flights are non-smoking flights. Smoking is prohibited in all areas of CEAIR aircrafts.15.4 Alcohol Except for the alcoholic drinks provided by CEAIR flights, Passengers shall not have any other

alcoholic drinks on board the aircraft.15.5 Seat Belts Compulsory While Passengers are in their seats on board the aircraft, Passengers shall fasten their seat belts as required.

Article 16 Administrative Formalities16.1 Passengers shall be solely responsible for complying with all laws, regulations, orders, provisions,

travel requirements and carriage regulatory rules of countries to be flown from, into or through which the Passengers transit and for obtaining all necessary travel documents. Passengers shall produce valid travel documents and allow CEAIR to take and retain copies thereof. CEAIR reserves the right to refuse carriage if Passengers have not complied with the relevant laws, regulations, orders or provisions of the aforesaid countries or Passengers’ travel documents are noncompliant with the requirements.

16.2 If any Passenger suffers any loss due to his/her failure to comply with the laws, regulations, orders or provisions of the countries concerned or to produce travel documents as required by the countries concerned, any such loss shall be borne by the Passenger. Such Passenger shall reimburse CEAIR on demand for any fines so paid or any expenditures so incurred by CEAIR.

16.3 If any Passenger is denied transit through the stopping place or entry into the destination country (region) which causes CEAIR, subject to the order issued by such country (region), to repatriate such Passenger back to the place of departure or any other place, such Passenger shall pay for the fares applicable to such repatriation trip and indemnify CEAIR against any and all other losses so caused to CEAIR.

16.4 Passengers shall be subject to any security check performed by governmental or airport officials.16.5 Passengers shall be on the spot when the relevant governmental department inspects the Checked Baggage or

Unchecked Baggage of such Passengers; and CEAIR will not be liable for any baggage loss which is attributable to the Passenger’s failure to comply with such requirement. (Please see Article 8.7 hereof)

16.6 Passengers shall not file any claims against CEAIR based on any information provided to them by CEAIR, its agents or employees with regard to travel documents, and any laws, regulations, orders, provisions or requirements related thereto.

Article 17 Successive Carriers Carriage to be performed by CEAIR and other Carriers under one Ticket or a Conjunction Ticket, or

carriage to be performed by CEAIR and the Carrier holding the Code Share Flight or the SkyTeam Alliance member Carrier under one Ticket or a Conjunction Ticket shall be deemed as an inseparable carriage; unless otherwise specified by laws, each Carrier listed on the Ticket shall be bound to the carriage liability for the Passengers in accordance with their respective carriage conditions.

Article 18 Liability for Damage18.1 General Principles18.1.1 CEAIR will be liable for losses caused during its carriage by air, unless otherwise specified in the laws

or agreed in the contract of carriage.18.1.2 CEAIR shall not be liable for any loss arising from its complying with or Passengers’ failure to comply

with applicable laws, regulations, governmental orders and rules.18.1.3 CEAIR’s liability for damage shall not exceed the limits of liability as prescribed in the international

Conventions or relevant aviation laws of the People’s Republic of China. Unless otherwise expressly prescribed by the applicable laws, CEAIR shall not be liable for any indirect loss or mental injury of any Passenger (including Baggage).

18.1.4 CEAIR will only be liable for its own actions of carriage by air according to applicable laws. Unless otherwise specified by the laws of the People’s Republic of China, CEAIR is only acting as an agent of other Carriers when it fills the tickets or checks the Baggage for flight carriage of such other Carriers.

18.1.5 If any damage is caused or triggered by fault of any Passenger, CEAIR may be exempted from or mitigate its liability for damages according to the applicable laws.

18.1.6 In the event that a Passenger’s Baggage or any item contained therein causes damage to the Passenger himself/herself or his/her own Baggage, CEAIR shall not be liable for such Passenger’s loss. If a Passenger’s items cause damage to any other persons or CEAIR’s properties, such Passenger shall compensate CEAIR for any and all losses caused thereby and any and all costs so incurred by CEAIR.

18.1.7 If any person other than a Passenger files a claim for any Passenger’s death or injury, and it has been proved that such death or injury was caused or contributed to by the Passenger’s own fault, CEAIR’s liability shall be exempted or mitigated in accordance with the degree of fault of such Passenger.

18.1.8 Any liability or limitations of liability with respect to CEAIR under these Conditions shall also apply to the agents, employees and representatives of CEAIR, and to any person, or any agent, employee and representative of such person whose aircraft is used by CEAIR. The aggregate amount of damages payable by CEAIR and the aforesaid agents, employees, representatives and any persons shall not exceed the limits of liability assumed by CEAIR.

18.1.9 Unless otherwise expressly specified by applicable laws, these Conditions shall not preclude CEAIR from enjoying relevant exemptions or limitations with respect to CEAIR’s liabilities prescribed by applicable laws and regulations.

18.2 Passenger Casualty18.2.1 CEAIR will be liable for Damages in case that accidents occurring on the aircraft or during the boarding

or alighting caused Passenger casualty; however, CEAIR shall not be liable for any Passenger’s death, injury or aggravated conditions that are caused by or attributable to such Passenger’s own age, mental or physical conditions during the carriage.

18.2.2 Except in the case that damage was due to CEAIR’s act or omission attributable to CEAIR’s intention or knowingly negligence, CEAIR will be liable for the actual Damages for the deaths, injuries or other physical harms of each Passenger, provided however, that CEAIR’s liability for damages shall be subject to the limits of liability prescribed in the Conventions approved and entered into by the People’s Republic of China and the effective policies published by the People’s Republic of China.

18.3 Baggage Loss18.3.1 CEAIR will be liable for the destruction or loss of, or Damage to any Checked Baggage of a Passenger

caused during the carriage by air. In the case of Unchecked Baggage, CEAIR will only be liable for Damage caused by fault attributable to CEAIR, its employees or agents.

18.3.2 CEAIR shall not be liable for the destruction or loss of, or damage to any Passenger’s Baggage which is entirely caused by the nature, quality or defects of such Baggage.

18.3.3 CEAIR shall not be liable for any damage to the Passenger or his/her properties which is caused by or arising from the Passenger’s Baggage due to the Passenger’s reasons. In the event that a Passenger’s Baggage or any items therein cause damage to other people or other people’s Baggage or CEAIR’ properties, such Passenger shall indemnify CEAIR or any other people against any and all losses caused and costs incurred thereby.

18.3.4 CEAIR will indemnify for the damaged value or cover the repair costs in the case of the destruction, loss, damage or delay of the Baggage of any Passenger. As for International Air Transport defined in the Conventions, the rules of liability prescribed in the Conventions shall apply; as for International Air Transport beyond those defined in the Conventions, any damage to the Baggage attributable to the carriage shall be indemnified in accordance with the relevant provisions under the Montreal Convention.

The limitations of liability in this Article hereof shall be implemented in accordance with the effective policies approved and published by the government of the People’s Republic of China.

18.3.5 CEAIR will indemnify the Baggage declared value provided that a Passenger has declared the value of the Baggage. But if the Baggage declared value is higher than the actual value of the Baggage as of the time of delivery at the destination, CEAIR will be liable for the damages to the extent of such actual value.

18.3.6 In the case of destruction, loss, damage or delay of any Checked Baggage or any item therein of any Passenger, the weight used to determine the limits of liability of CEAIR shall be the weight of such damaged Baggage or items therein; if the weight of the damaged Baggage or items therein cannot be determined, the damaged Baggage of the Passenger shall be no more than the Free Baggage Allowance enjoyed by such Passenger.

18.3.7 In the case of destruction or loss of, or damage to any restricted items as set forth in Article 8.1.3 hereof in the Baggage of any Passenger, CEAIR will be liable for damages in accordance with normal Checked Baggage.

18.3.8 In the case of damage to any cash, negotiable notes, negotiable securities, bills of exchange, fragile or vulnerable goods, perishable goods, jewelry, precious metal and metal products, gold and silver products, antique calligraphy and painting, out-of-print videos, out-of-print manuscripts or prints, samples or other valuables, important documents or materials, diplomatic envelopes, travel documents, computers and accessories, personal communicators and accessories, personal electronic digital equipments and accessories, and other items to be taken custody by people, and personal prescription medicine to be taken regularly, CEAIR will be liable for damages in accordance with general Checked Baggage.

18.3.9 Unless the damage is otherwise attributable to CEAIR’ fault, CEAIR shall not be liable for any damage to Unchecked Baggage or the cabin-seat Baggage of any Passenger.

18.3.10 When indemnifying Baggage losses, charges for excess Baggage will be refunded but surcharges paid for the Baggage value declaration will not be refunded.

18.3.11 CEAIR will promptly notify a Passenger after locating the lost Baggage which has been indemnified. Such Passenger may retrieve his/her Baggage and reimburse CEAIR with all the indemnity except for the compensation for temporary articles for daily use. CEAIR is entitled to recover all the indemnity paid in case of fraudulent act of such Passenger.

18.3.12 In the case of any Baggage loss occurring during the domestic flight segment which constitutes an International Air Transport or Regional Route Air Transport, such Baggage loss shall be indemnified in accordance with the applicable provisions on Baggage loss of the International Air Transport or Regional Route Air Transport.

18.3.13 If the Checked Baggage of a non-resident Passenger fails to arrive in the same aircraft with the Passenger due to CEAIR’s reasons, CEAIR will pay a compensation for temporary articles for daily use to such Passenger according to the Regulation of CEAIR.

18.3.14 In the case of damage to or loss of any checked Assistive Device for Individual with a Disability Passenger, the actual price of such equipment shall be indemnified except for the part of the equipment which has been damaged and the Passenger has executed a disclaimer for such damage prior to such equipment’s delivery for carriage.

18.4 In the case of losses caused to Passengers and Baggage attributable to delay during the carriage by air, CEAIR will make proper compensation in accordance with the relevant international Conventions and the laws and regulations of the People’s Republic of China, provided, however, that if the delay is caused by any reason beyond CEAIR’s control or unavoidable by CEAIR, and that CEAIR can prove CEAIR, its employees and agents have taken all reasonable measures or it was impossible to take such measures to prevent the losses, CEAIR shall not be liable for damages caused by such delay.

18.5 Upon a flight delay, if any Passenger fails to take proper measures to prevent the losses from extending, such Passenger shall not claim for the extended part of losses against CEAIR.

18.6 In the event of the International Air Transport or Regional Route Air Transport as defined in the respective Conventions, the rules of liability for damages prescribed in the applicable Conventions shall apply; in the event of the International Air Transport or Regional Route Air Transport beyond those defined in the Conventions, CEAIR will be liable for damages in accordance with the relevant provisions of the Montreal Convention.

Article 19 Claims and Actions19.1 Claims19.1.1 If a Passenger fails to submit a written claim within the time limit prescribed by the applicable laws after

collecting the Checked Baggage, such Baggage shall be presumed to have been delivered in good condition according to the Contract of Carriage, unless the Passenger otherwise provides evidence to the contrary. In the event of Baggage loss, a Passenger shall notify CEAIR upon the arrival of the flight and record the irregular carriage of Baggage as the prima facie evidence for claims. CEAIR will not accept any claim which is not issued within the time limit as prescribed in Article 19.1.2 hereof.

19.1.2 Upon the occurrence of any destruction, loss, damage or delay of any Baggage, the Passenger shall submit a written claim to CEAIR within and no later than 7 Days (applicable to damage or loss) or 21 Days (applicable to delay) after the collection of the Baggage.

19.1.3 In the event of failure to submit a written claim within the time limit provided in Article 19.1.2 hereof, no action shall be filed against CEAIR.

19.2 Any action for damages with respect to Passengers or Baggage shall be filed within two years from the date on which the CEAIR flight arrives or should have arrived at the destination or on which the carriage terminates.

19.3 In the event of any destruction, loss, damage or delay of any Baggage, a Passenger may file an action against the first Carrier or the last Carrier, or the actual Carrier responsible for the segment during which the destruction, loss, damage or delay occurs.

19.4 Basis for Claim19.4.1 Any action for damages with respect to the carriage of Passengers or Baggage, irrespective of any

governing law of the relevant countries, contract, tort or any other reason that such action is based on, shall only be limited to the conditions and limits of liability as prescribed in the Convention for the Unification of Certain Rules for International Carriage by Air (signed at Montreal on May 28, 1999).

19.4.2 Pursuant to the Convention for the Unification of Certain Rules for International Carriage by Air (signed at Montreal on May 28, 1999), no punitive damages, exemplary damages or any non-compensational damages of any other kind shall be filed in any such action.

19.4.3 The governing laws shall be subject to Articles 131 and 184 of the Civil Aviation Law of the People's Republic of China and Article 142 of the General Principles of the Civil Law.

Article 20 Effectiveness and Modification20.1 These Conditions shall become effective and come into force as from [?], 201[?]; from the effective

date, the General Conditions of International Carriage for Passenger and Baggage of China Eastern Airlines implemented on [Date] shall be invalidated thereafter.

20.2 CEAIR may modify these Conditions without notice in accordance with the procedures as stipulated by the Civil Aviation Administration of China, but such modification shall not be applicable to any carriage having commenced prior to such modification.

20.3 No agent, employee or representative of CEAIR shall have the authority to modify or violate any provision of these Conditions.

20.4 The heading of each Article under these Conditions is used for convenience only and shall not be taken into consideration in the interpretation of any provisions hereunder.

20.5 These Conditions are written in both Chinese and English and both language versions shall be equally valid.

http://us.ceair.com/muovc/main/en_US/Static_pages/GeneralConditions.html

Monday, September 28, 2015

OpinionBusinessMirrorA10

Another Philippine world record?

editorial

The Philippines does not hold the world record, but we are right up there in contention for that honor.

Looking at the results of our regional neighbors, the Philippines comes in with a 2015 score of “19,”

while our closest competitor is the Malaysian capital of Kuala Lumpur, with “15.” Thailand is close behind with “14,” as is Jakarta, Indonesia. Singapore, on the other hand, is not even in the running, with a score of only “11.”

But the high ranking of the Philippines does come with a price. It costs the Philippine economy about P8,000 for every man, woman and child in the country.

We are speaking of the 19 national holidays, when productive work is significantly curtailed.

By the end of 2015, the Philippines will have celebrated 19 “regular” and “special nonworking” holidays, ranging from the regular New Year’s Day on January 1st to the special nonworking day to commemorate the “last day of the year” on December 31st.

To be fair, one of this year’s holidays—All Saints’ Day—falls on a Sun-day, so the economic impact is reduced. But that is only a twist of the calendar, because in 2016 both Monday, October 31, 2016, and Tuesday, November 1, 2106, will be nonworking days.

The total Philippine economic output for 2014 amounted to approximately P45 billion per day, based on a conservative 300-business-day year. even if we assume that the nonworking holidays still generate even 50 percent of the normal daily economic production, we are still talking about a loss of some P400 billion of economic activity.

Of course, that money is not taken directly out of our pockets, although the government does lose a substantial amount of tax revenues from the income that is not produced. But it is an opportunity loss in the same way that we complain about the loss of productive hours sitting in traffic jams.

holidays are important to take time to observe national historic events and to celebrate the lives of our national heroes. Religious holidays, while limited to the followers of those religions, might be important to com-memorate as a part of society’s history and structure. But where exactly does December 24th, as an “additional special nonworking day,” fit into the social, historical, or religious fabric of the Philippines? That sounds more like a schoolchild complaining to stay home and watch TV, instead of going to school “just because.”

We need to rationalize this holiday schedule. Singapore has a very diverse multicultural and multireligious society, yet, it only has 11 nonworking days. Singapore limits its historical and heroes holidays to only one: its national independence day. China has many holidays (16), too, but the economy compensates by working on a traditional off-day, like Saturday or Sunday.

The Philippines will lose almost 20 percent of its productive Monday-through-Friday working days from November 30, 2015, until January 2, 2016. Does that really make economic sense?

IT was an honor to be invited as the guest speaker at the opening ceremony of the Lumban, Laguna, 437th town founding anniversary festivities.

Lumban: The country’s ‘embroidery capital’

The event, held at the Lumban covered court on September 22, also saw the official launch of the Bur-dang Lumban town festival, with this year’s theme being “Burda ng Malikhaing Lumbeño, Ipagmalaki sa Buong Mundo.”

My thanks to Mayor Reynato Añonuevo for the warm invitation and welcome that I received, and also to other officials, including Vice Mayor Rolando Ubatay and Vice Gov. Atty. Karen Agapay.

The town of Lumban has made itself known as the embroidery capital of the country, and its people take great pride in their craftsman-ship. In the same manner, another Laguna town of artisans, Paete, is famous for the skil l of its woodworkers.

The dress code at the event was “Filipiniana,” and the attendees took the opportunity to come in their best finery of barong Tagalog and baro at saya, in different col-ors and styles. There was an award bestowed for the best-dressed in ladies’ and men’s wear, and given the beauty of the outfits worn that

day, it was difficult for the judges to make their selection.

having myself seen and pur-chased fine examples of Lumban embroidery work, such as barong Tagalog and other items, I can say that the quality of the work is im-pressive and something that we can be proud of as Filipinos.

Among the items we saw on display at the venue were not only barong, but also heavily embroidered ladies’ tops, skirts, dresses and gowns; hand-painted and beaded scarves that transform ordinary dresses into festive garb; accessory and jewelry pouches; hand-painted fabric fans; and other examples of the town’s best products. It is in-teresting to see how materials as simple as fabric and thread can be transformed into breathtaking works by the artistry and skill of Lumban’s designers, embroiderers and finishers.

We look forward to how the town’s designers and artists can extend their skills into other fields, such as haute couture and fine arts (through textile art), and how the

entrepreneurs can use their market-ing skills to promote the products they create, to contribute to the economic and social development of Lumban.

Once again, happy 437th an-niversary to the town of Lumban!

n n n

The Philippine Charity Sweep-stakes Office (PCSO) will be dis-tributing around 700 ambulances this year, as circumstances permit.

In line with this, last week I and fellow PCSO Directors Mabel Mamba and Francisco G. Joaquin III traveled to Cagayan de Oro City to turn over 11 ambulances to the provinces of Misamis Oriental and Bukidnon.

We also conducted other agency activities there, including the bless-ing of the newly transferred PCSO branch office and the turnover of checks to the local government unit (LGU) for its PCSO Lotto shares.

The ceremony was held on Sep-tember 24 at the PCSO branch office at the Abap Building in Cagayan de Oro City, which was “rented” to the agency at P1 per year by the provin-cial government, headed by Gov. Yevgeny emano, who was present at the event.

Also with him were Rep. Rufus Rodriguez of the Second District and Party-list Rep. Maximo Rodri-guez Jr. of Abante Mindanao, and others from the LGU, representa-tives of the ambulance recipients and other guests.

Those that received brand-new PCSO ambulances were Cagayan de Oro City, Northern Mindanao

Medical Center, Central Mindanao University (Bukidnon), Mindanao University of Science and Technol-ogy, Misamis Oriental State College of Agriculture, Mindanao State Uni-versity (Marawi), Misamis Oriental Cares Tagoloan, Inatao, Balingasag, Opol and Magsaysay.

In June we also turned over eight ambulances to the same two provinces: to Claveria, JR Borja, Libertad, Naawan, Talisayan, and Villanueva in Misamis Oriental, and to Cabanglasan and Valencia City in Bukidnon. These vehicles are distributed to qualified LGUs, hospi-tals, state agencies and associations under the PCSO A mbulance Donation Program.

We also handed checks worth a total of P3.6 million to Cagayan de Oro City (P3.4 million) and to Misamis Oriental (P213,601.20), their LGU shares from the op-erations of PCSO Lotto outlets in their areas.

The more outlets there are in an area and the higher the PCSO sales generated, the higher the LGU shares are that will benefit the people there and contribute to their well-being and the area’s development.

In its 81st year, the PCSO contin-ues to serve the people by providing medical- and health-care-related services that have made the agency a beacon of hope for those in need.

Atty. Rojas is the vice chairman and general manager of the Philippine Charity Sweepstakes Office.

RISING SUNAtty. Jose Ferdinand M. Rojas II

AS a lawyer, I often receive inquiries in my social-media accounts about online libel. In this day and age, where the Internet has become part of every Filipino’s life, and where most, if not all

of us, use the cyberspace every single day, knowing the parameters in the use of the Internet will save a lot of netizens from trouble.

Online libel

On July 25, 2011, Congress passed and the President approved Republic Act 10175, otherwise known as the Cybercrime Preven-tion Act of 2012 (“Cybercrime Law”), which, among others, made online libel unlawful. Section 4(c)(4) thereof states that “the unlaw-ful or prohibited acts of libel as de-fined in Article 355 of the Revised Penal Code [RPC], as amended, committed through a comput-er system or any other similar means which may be devised in the future,” constitute the offense of cybercrime.

On August 12, 2015, the depart-ments of Justice, Interior and Local Government, and Science and Tech-

nology, pursuant to the authority granted to them under the said law, promulgated the rules and regula-tions implementing the said law. Section 5(3) thereof spelled out the penalty for the crime of online libel—prision correccional in its maximum period to prision mayor in its mini-mum period, or a fine ranging from P6,000 up to the maximum amount determined by court, or both. Prision correccional carries with it the pen-alty of imprisonment ranging from six months and one day to six years, while prision mayor carries with it the penalty of imprisonment for six years and one day to 12 years.

Considering the gravity of the penalty of the crime of online libel,

it is best to know what constitutes this crime. Since the libel provision of the Cybercrime Law merely in-corporates to form part of it, the provisions of RPC on libel, how the latter law defines this crime finds application to the former. Under Article 353 of the RPC, a libel is a public and malicious imputation of a crime or of a vice or defect, real or imaginary, or any act, omission, con-dition, status, or circumstance tend-ing to cause the dishonor, discredit, or contempt of a natural or juridical person, or to blacken the memory of one who is dead.

Article 355 of the same law fur-ther provides that a libel is commit-ted by means of writing, printing, lithography, engraving, radio, pho-nograph, painting, theatrical exhibi-tion, cinematographic exhibition, or any similar means. Thus, a netizen who posts something, be it in words or pictures, which is intended to harm the reputation of another by tend-ing to bring the target into ridicule, hatred, scorn or contempt of others may be found guilty of online libel.

however, the Supreme Court (SC) clarified in the consolidated cases of Disini, et. al vs. the Secretary of Justice, et. al (GR No. 203335, 11 February 2014) that online libel

brings with it certain intricacies, unheard of when the provisions on libel in the RPC were enacted and that the culture associated with Internet media is distinct from that of print.

The SC explained that the In-ternet is characterized as encoura-ging a freewheeling, anything-goes writing style. In a sense, they are a world apart in terms of quickness of the reader’s reaction to defamatory statements posted in cyberspace, facilitated by one-click reply options offered by the networking site, as well as by the speed with which such reactions are disseminated down the line to other Internet users.

Thus, only the original author of the libelous post is punished under the Cybercrime Law. Those who liked, shared, or retweeted a post, or those who merely made a favorable comment thereon, the person who posted a link to the blog site where the same was posted, or others who simply received the post and reacted to it are not li-able for online libel. The Supreme Court considered these persons to be merely knee-jerk sentiments of readers who may think little or haphazardly of their response to the original posting.

Continued on A11

leGAlly SpeAkINGAtty. lorna patajo-kapunan

Monday, September 28, 2015

[email protected]

Unbelievable stupidity

The problem with a DNA as le-gal proof of ethnicity to qualify for the presidency is that it will be used after we are invaded by a superior race to establish which of us has enough of the invader’s DNA to go on living in the coun-try they conquered. After al l even Nazis let Jews live, provided they proved a legal minimum of Germanicness.

Poe was turned over to her ad-opted parents in the Philippines, as a foundling found there, and not shipped from elsewhere. When she was grown up, she married an obviously ethnic Filipino—just go-ing by the height, or lack thereof, of the bridge of his nose. (Mine is Roman in altitude.) And then she

did what all Filipinos are dying to do except those too lazy to work: she adopted the citizenship of the United States. There she worked at a wholesaler’s.

Like all Filipinos so fortunate, she reacquired, by a redeclaration of allegiance, her Filipino citizen-ship by means of a law of which I was a principal author.

In any case, changes of citizen-ship are not a disqualification for high office. Natural born is a fact that no law or legal act to the contrary can overturn. It is just the fact that when you emerged f rom your mother ’s Fi l ipino v a g i n a , you were n at u ra l ly born a Filipino.

You are or you are not Filipino.

Part 2Tax Academy models

The tax academy of the Philippines follows the model of similar dedicated learning institutions for tax authorities globally. Most tax authorities of the developed countries,

including the United States of America, Great Britain, Germany, Australia and others have training institutions catering to the learning requirements of their tax collectors. In Asia, such countries as Japan, China, Malaysia, Singapore and India have these tax academies training their tax collectors.

I visited the National Tax Col-lege (NTC) of the National Tax Ad-ministration of Japan in 2009. My observations and findings of the way the NTC is operated greatly inf luenced the Philippine Tax Academy (PTA) legislation that we drafted.

The NTC of Japan is an institu-tion that provides training to Ja-pan’s tax officials as national pub-lic employees. The NTC consists of the Central Institute—composed today of the Kasumigaseki Office and the Wako Campus—and 12 regional training centers locat-ed throughout Japan. The Wako Campus is the ideal training facil-ity, with its enviable resources of administration building, several training buildings, and auditorium, a student center, a gymnasium, several dormitory buildings with condominium-like rooms, and even a tax museum.

The National Tax Agency em-ploys a staff training system structured around the following

three pillars: (1) Group training programs provided by NTC; (2) On-the-job training individually provided by supervisors and duty advisors in the course of every-day work; and (3) Group training courses held at the workplace. The NTC also trains new recruits from high school and universities so that they can carry out the duties expected of them as tax officials. The NTC provides regular job training update programs for tax officials who are already working in the field, enabling them to keep pace with the most recent changes. Furthermore, the NTC engages in academic surveys and research on taxation while providing in-ternational training programs for overseas tax officials mostly from Asia as part of international cooperation activities. In fact, the NTC has regularly been provid-ing training to Bureau of Internal Revenue (BIR) officials who go to Japan for these courses for several years already.

Philippine Tax Academy: The envisioned center of learning for government tax collectors and CPAs

The DNA test to establish Grace Poe’s racial credentials as a Filipino is wrong in every way. You are Filipino if no one can prove you are not. No person should ever be put

to the test of his or her religion or race, not least because our race is widely regarded as inferior, as opposed to the Chinese, Japanese, American and european races in every field except amateur singing, and the African race in athletics. We are short and lack the majesty and easy grace that height confers. Despite our diminutive size, however, we lack the speed of a cockroach. Our only quality is our decency. We have never indulged in mass murder, unlike the races aforementioned; Rwanda being the latest manifestation of the common characteristic shared by the superior races. On the contrary, we Filipinos are given to gestures of mass kindness as when de Lima offered to take in Rohingyas fleeing Buddhist mass murderers.

Free FireTeddy Locsin Jr.

The PTA can also follow the lead of other training institutes and academies in the Philippine bu-reaucracy, including the Depart-ment of Trade Industry, Philip-pine Trade Training Center, Civil Service Institute, Philippine Mili-tary Academy, Philippine Nation-al Academy, Philippine Judicial Academy, Bangko Sentral ng Pili-pinas Institute, Commission on Audit Professional Development Center, Department of the Inte-rior and Local Government-Local Government Academy, National education Academy, Foreign Ser-vice Institute, National Defense College, National economic and Development Authority Statisti-cal Research and Training Center, COA Professional Development Center, Development Academy of the Philippines, Technical educa-tion and Skills Development Au-thority, and the Department of Science and Technology -Technology Resource Center.

Therefore, the PTA has already several success stories that it can follow both on the local, as well as international area.

Status of the Philippine Tax Academy ActRePUBLIC Act (RA) 10143 pro-vides that the Secretary of fi-nance, in coordination with the commissioner of the BIR, com-missioner of the Bureau of Cus-toms (BOC), and the executive director of the Bureau of Local Government Finance (BLGF), and in consultation with representa-tives from academe, shall issue the implementing rules and regu-lations (IRR)within 90 days from the effectivity of the law. however, after more than five years from the passage of the law, the IRR have not yet been issued and hence, the PTA unfortunately has not been established to date.

The Senate Tax Study and Re-search Office (STSRO), in its Tax Bits publication of July-August 2013, published an article en-titled “RA 10143: A Case of Law Impoundment?” The article dis-cussed the features of the law and cited that several stakeholders, including the STSRO, representa-

tives from concerned sectors, such as academe were active partici-pants in the drafting of the IRR for the PTA.

The group tasked to draft the IRR was chaired by the Finance Undersecretary Carlo Carag, some-time in 2011. The article also dis-closed that in February and April 2013, the STSRO, through Direc-tor General lawyer Rodelio Dascil, wrote a follow-up letter to Finance Secretary Cesar V. Purisima and Carag inquiring on the status of the IRR of RA 10143.

The article raised the issue that several years have passed since the 15th Congress, which legislated the PTA Act ended on June 30, 2013. The article raised two questions: Where is the IRR for the Tax Academy? Why have the Department of Finance (DOF), BIR, BOC and BLGF ref used to implement RA 10143?

On September 29, 2014 and May 25, 2015, I, as chairman of the Board of Accountancy (BOA), wrote to Carag. I cited the interest of the BOA on the IRR of the PTA Act since the academy, once estab-lished, will provide the training for the tax collectors of the BIR, BOC and local government unit (LGU), including the certified public accountants (CPAs) in the aforementioned offices. As such, the BOA is interested in know-ing and assisting in the immedi-ate implementation of this law which will benefit the govern-ment CPAs which are stakehold-ers of the BOA.

In said letters, I also indicated to Carag that I was previously in-volved in the drafting of the PTA Act and the initial planning for the implementation of the same when I was the senior deputy com-missioner and commissioner of internal revenue from November 2009 to December 2010. I also indicated that the implementa-tion of the law will greatly ben-efit the government service of the three offices and should be implemented as soon as possible.

Though I still have to be given the IRR, I have since then been contacting the DOF to move for-

ward the issuance of the IRR for the establishment of the academy. I understand that the IRR will soon be approved.

Moving forwardI BeLIeVe that it is a matter of time before we will have a PTA that will redound to the benefit of both the tax collectors and the tax-paying public. Once the IRR is issued by the DOF, the detailed planning for the implementation and establish-ment of the academy can proceed.

What are the requirements for this implementation?

Securing a budget appropria-tion for the PTA must be included in the DOF budget. The DOF is the mother agency responsible for the BIR, BOC and BLGG. Thus, it is the DOF which should include in the department budget the funds for the initial implementation of the academy.

The Board of Trustees (BOT) must convene immediately. This will require appointments by the President of the Philippines from a nominee list to be submitted by the secretary of finance.

The nominees shall include the three representatives from academe. The representative of the DOF, who is designated as the chairman of the board, must call the seven-man BOT for an organizational meeting to dis-cuss the initial implementation and policy issues for the establishment of the academy.

The secretary of finance must appoint the executive officers of the academy consisting of the President and three chancellors and vice chancellors to adminis-ter the institutes for the BIR, the BOC and the BLGF.

The executive officers must prepare the strategic and imple-mentation plans for the academy and the three institutes. These shall include formulating the mission and vision of the acad-emy; the venue for the academy and its facilities; the staffing pat-tern for the administration of the academy; the staffing pattern for the faculty and trainors of the academy; the training curriculum for the three institutes, which shall include a “ ladderized” pro-

gram for the entire career of tax col lectors; the admission policies for new recruits of the three tax-col lecting agencies, linkages with external organiza-tions tobe established, and many other concerns.

A potential venue for the academy and its facilities can be the BIR Re-gional Office in San Pablo, Laguna. This is a relatively newly constructed facility of the BIR with a large land area for expansion. The site is appro-priate for live-in training of tax offi-cers that is somewhat secluded from the distractions of a metropolis. At the same time, the BIR Regional Of-fice can relocate to a more proximate location in Calamba, Laguna, where the regional government center for Region 4A is located.

In formulating these policies, strategies and procedures, con-sultations with the various stake-holders should be done. These stakeholders include the tax ex-perts from the various profes-sional and private sector organi-zations, including the Philippine Institute of Certified Public Ac-countants, the Tax Management Association of the Philippines, the Integrated Bar of the Philip-pines. Consultations should also be made with the various govern-ment and private sector academic and training organizations.

The ongoing training and hu-man resource programs of the BIR, BOC and LGUs should be re-viewed and integrated in the pro-grams of the academy. The various studies conducted on the training requirements and programs of the three agencies should be retrieved a nd re v ie wed to deter m i ne its relevance.

Assistance in conducting this implementation planning can be secured from the various interna-tional developmental organiza-tions, such as the International Monetar y Fund, Word Bank, USAID, Jica, GTZ, AusAid, Asian Development Bank, UNDP, CIDA, OeCD, and others.

With all these in place, it will be a matter of time when the PTA will be a reality and serving the needs of the tax-collecting agencies and the tax-paying public.

DeBiT CreDiTJoel L. Tan-Torres

And the burden of proof is on the shoulders of those who say you are not because they cannot beat you in a fair election. They should try cheating instead. It is less of a

threat to the survival of our race. A DNA test—like the repro-

ductive law definition of “hu-mans” as “economic assets fit to live” thereby excluding Filipino,

as compared to harder working and economically more produc-tive Chinese, as humans—is how one stupid race declares that its fitness must be proved, first in

the case of the presidency—a po-sition historically best used for stealing—and then of our con-tinued existence in this world. Unbelievable.

The foregoing notwithstanding, netizens should be reminded that even if they are not the original au-thor of a libelous post, should their comment thereon transgress what the SC defines as a random and spontaneous reaction to a post, but actually creates an altogether new

defamatory story against another, said comment may be considered an original posting published on the Internet, making them guilty for online libel.

Thus, before posting anything online or comment on a post in any social-networking site, netizens should first think about its reper-cussion. As one television network puts it, “Think before you click.”

Online libelContinued from A10